project: “enhancing synergies in commonwealth of
TRANSCRIPT
Project: “Enhancing Synergies in
Commonwealth of Independent States (CIS)
National Programmes on Energy Efficiency
and Energy Saving for Greater Energy
Security”
Regional study “Analysis of policies of CIS
countries on improving energy efficiency and
potential for developing cooperation and
enhancing synergies in the CIS region”
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List of abbreviations:
AC Agricultural complex
GDP Gross Domestic Product
CES The Common Economic Space
CHP Central Heat and Power/Thermal Power Station
CIS Commonwealth of Independent States
CIS UEM CIS Unified Electricity Market
COP Coefficient of Performance
EU European Union
EE Energy Efficiency
EM Energy Mix
ES Energy Saving
ESCO Energy Service Company
FERs Fuel and Energy Resources
HCS Housing and Community Services
LTF Local types of fuel (non-imported)
MW Megawatt
PES Primary Energy Sources
PPP Purchasing Power Parity
R&D Research and Development
RES Renewable Energy Sources
SCO The Shanghai Cooperation Organization
t.o.e. tons of oil equivalent
t.f.e. tons of fuel equivalent
TWh Terawatt-hour
IMF International Monetary Fund
JSC Joint Stock Company
kWh kilowatt-hour
UN United Nations Organization
UNDP United Nations Development Programme
UN ECE United Nations Economic Commission for Europe
UN ESCAP The United Nations Economic and Social Commission
for Asia and the Pacific
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Project: “Scaling upthe synergetic effect of the CIS member-states` national programs on energy
efficiency and energy saving for energy security” ............................................................................... 1
Regional study “Analysis of the CIS member-states` policies on increasing energy efficiency and
potential for development of cooperation in the CIS region to achieve the synergy effect” .................. 1
List of abbreviations: ......................................................................................................................... 2
Introduction ...................................................................................................................................... 6
Chapter I. Comparative analysis of the national programs and measures undertaken to improve
energy efficiency and energy saving in CIS countries. .......................................................................... 8
1.1. Economic situation ............................................................................................................................. 8
1.2. Energy market, balance of energy consumption ............................................................................. 11
1.3 Analysis of the CIS countries policies in the energy saving area ....................................................... 18
1.4. Main institutions and organizations responsible for policy and programs in the area of energy
efficiency and energy saving ................................................................................................................... 39
1.5. Existing programs in the field of energy efficiency and energy saving. Planned programs in the
field of energy efficiency and energy saving. .......................................................................................... 42
Chapter II. Potentialandfeasibilityforenergysavingandenergyefficiencyin CIS countries. .................... 49
2.1 Energy supply saving potential.......................................................................................................... 49
2.2 Energy consumption saving potential ............................................................................................... 51
2.3. The most effective approaches, tools and incentives for energy efficiency in the CIS countries.... 58
Chapter III. International cooperation of CIS members in the field of energy efficiency and energy
saving .............................................................................................................................................. 65
3.1. Analysis of status-quo of international cooperation of CIS members in the field of energy
efficiency and energy saving ................................................................................................................... 65
3.2. Analysis of national energy saving and energy efficiency programs in the context of opportunities
of deepening cooperation between the CIS countries ........................................................................... 70
3.3. Implication of cooperation between the CIS member states .......................................................... 73
3.4. Prospective directions of cooperation within the CIS. The most efficient approaches to developing
cooperation between the CIS countries in the field of energy saving. ................................................... 76
3.5. Opportunities of deepening cooperation between the CIS countries within the UN, other
international organizations and initiatives for the purposes of achievement of priority goals in the
field of energy security, energy efficiency and renewable energy ......................................................... 80
Conclusions ..................................................................................................................................... 83
ANNEXES ................................................................................................. Error! Bookmark not defined.
Brief Overview on the CIS Countries ................................................................................................. 89
Annex 1. Republic of Azerbaijan ............................................................................................................. 89
Annex 2. Republic of Armenia ................................................................................................................. 93
Annex 3. Republic of Belarus ................................................................................................................... 96
Annex 4. Republic of Kazakhstan .......................................................................................................... 100
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Annex 5. Kyrgyz Republic. ..................................................................................................................... 104
Annex 6. Republic of Moldova. ............................................................................................................. 108
Annex 7. Russian Federation. ................................................................................................................ 110
Annex 8. Republic of Tajikistan. ............................................................................................................ 113
Annex 9. Turkmenistan ......................................................................................................................... 116
Annex 10. Republic of Uzbekistan. ........................................................................................................ 119
Annex 11. Ukraine ................................................................................................................................. 121
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Introduction
The present study analyses and summarizes the information stated in the
reports by the national experts regarding goals and objectives, approaches,
priorities and mechanisms of increasing the energy efficiency in the CIS member-
states.
Nowadays, most CIS countries have been concerned over high energy
intensity of GDP, which exceeds 2-3 times the GDP energy intensity of the
advanced countries. Presently, almost all Commonwealth countries recognize the
capacities of energy saving and design therefore national policies to improve the
energy efficiency in a way that the realization of energy efficiency potential
promotes the priority tasks solution of national economic and social development.
The national programs became an efficient instrument for implementation of the
national policy in energy efficiency.
First chapter of the survey briefly describes the status of economy and of
energy market in the CIS countries, provides an assessment of energy saving
potential and an in-depth analysis of the national policies on energy efficiency
improvement in the CIS countries. It also examines main objectives that are being
solved in the framework of policy implementation on energy efficiency
improvement. Furthermore, it outlines the existing political, legal, institutional and
financial factors that lead to the improvement in energy efficiency and energy
saving.
Second chapter examines the potential of improved energy efficiency and
energy saving in the field of energy production and consumption, including
industry sector, transport, housing and community services, and agriculture.
Given that CIS countries differ substantially in terms of the national
economies’ structure and availability of energy resources, their policy priorities on
improvement of energy efficiency and use of renewable energy sources, as well as
the approaches to the implementation of policies are also different.
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Upon the results of the analysis there had been revealed the common factors
affecting the effectiveness of the current policy, there had been identified effective
approaches for the policy design on legislative, institutional, application (program)
and management levels.
Third chapter is dedicated to the generalization and comprehension of the
accumulated experience of international cooperation in energy efficiency
improvement. It analysis the national programs on energy efficiency and energy
saving in terms of the expansion of international cooperation, as well as it gives the
recommendations on various forms and methods of its realization.
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Chapter I. Comparative analysis of the national programs and measures
undertaken to improve energy efficiency and energy saving in CIS
countries.
Current CIS member states are: Republic of Azerbaijan, Republic of
Armenia, Republic of Belarus, Republic of Kazakhstan, Kyrgyz Republic,
Republic of Moldova, Russian Federation, Republic of Tajikistan, Turkmenistan,
Republic of Uzbekistan, and Ukraine.
1.1. Economic situation
The Commonwealth of Independent States holds a substantial resource
potential. It occupies 16.4% of world’s territory on which approximately lives
4.4% of world’s population. The CIS share of global conventional oil accounts for
20%, gas reserves – 40%, coal – 25%, power generation – 10%. Given its
geographical position the CIS region has an important transit potential. Its
transport and communication systems` role in the global transport system is
becoming increasingly important.
At the same time, the standard of living of population in the CIS member
states is very dissimilar and generally falls behind of that one in the advanced
countries. Politically and economically, the region in general is estimated as
heterogeneous and unstable.
Over a period of 20 years of economic development of the CIS countries one
can distinguish several periods:
1991-1999 – the period of a deep economic decrease due to disintegration of
the former USSR,
2000 – 2007 – the period of dynamic economic boost,
2008 – 2011 – the period of global financial crisis and first post-crisis years,
characterized by serious changes in dynamics of global economic activity.
In the 90s of the previous century all the CIS countries faced a deep (up to
40% in 1998) adaptive decrease related to the collapse of the USSR, after which
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followed the period of restorative economic growth. The scale of decrease in the
years of 1990 reflected in fact how tight were the inter-republican ties within the
framework of the USSR’s common national economic complex. The level of
decrease reflected the negative synergy of geopolitical and transformational
shocks, as well as unfavorable foreign trade conditions and ethnic tensions in a
range of post-soviet countries.
In the period 2001-2007 the favorable economic conditions in most CIS
countries allowed to ensure high level of macroeconomic indicators’ growth.
The total GDP of CIS countries according to IMF evaluations on the PPP
amounted in 2008 around 2.9 trillion US$ or 4.5% of the World GDP. By the same
token in the pre-crisis 2007 the CIS was one of the most dynamically developing
regions in the world. The average rate of economic growth in the CIS member
states comprised 9%. On average, the GDP growth in the CIS countries in 2008
compared to the previous year comprised 5.5%, which is substantially higher than
in other countries on average (3.2%). The CIS share in the global export counted
for 3.5%, in the global trade, in services for 2.5%. In 2008 the total CIS countries’
export volume almost reached US$ 700 billion, import – US$ 460 billion.
The global financial crisis in the end of 2008-2009 demonstrated a great
vulnerability of CIS countries’ economies to the external shocks. The CIS
countries export more than 1/5 of their products to the Commonwealth’s member
states, more than a half – to the European countries and roughly 1/10 – to the Asian
countries.
In 2009 the economy of most CIS countries was in a state of recession. On
average in the CIS countries the GDP in January-July 2009 compared to the same
period in the previous year decreased by 9% while in January-July 2008 increased
by 7%. The crisis`s effect differed in the given countries. Ukraine, Armenia,
Russia faced a quite severe decline, whereas the economy of Azerbaijan,
Turkmenistan and Uzbekistan retained quite high growth rates. Differentiated
reaction to the crisis reflects the level of dissimilation in countries` economy
structures and national management systems.
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In January-July 2009 almost all CIS countries faced the decrease in the
volume of industrial production. On average, the CIS countries compared to the
same period of the previous year the volume of industrial production declined by
15%. At the same time, almost in every country the most rapid rates of decline
were recorded in the manufacturing industry sector. The volume of transported
goods fell by 20%, fixed capital investments by 16%, retail turnover by 5%. All
countries witnessed a strong decrease in the monetary volume of foreign trade.
Among the consequences of the crisis there should be first of all identified
the exacerbation of economic contradictions between the CIS countries and
simultaneously activation of works upon creation of the Customs Union consisted
of Belarus, Kazakhstan, and Russia. The Customs Union came into force in
January 2010.
Globalization strongly impedes the alignment of diversification of the
economy in the post-Soviet states what in its turn requires substantial financial
resources, new types of technology, qualified and skilled workers, effective
institutions, and certainly fresh ideas for development. So far the growth has been
influenced by global demand which generally promotes the growth of the primary
industry sector.
Thereupon, there is great importance of orientation of integration projects,
primarily of the CES for a qualitative growth of the national economies.
At the stage of the gradual overcoming of the global financial crisis`
consequences (and probably on the brink of its second wave) the economic growth
in the CIS countries relies on the former model of development while adjusting for
some more limited investment flows comparing to pre-crisis periods and increased
level of the national debt in a range of states in the region. At the same time, by
some other indicators of vulnerability to external shocks, the CIS countries are in a
more favorable condition if compare to the year 2008.
Countries importing energy sources (excluding Armenia and Belarus) saw a
significant decrease of the current account deficit compared to the indicators of the
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pre-crisis period, thank to what they need less external borrowings and they are to
a lesser extent exposed to the risk of changeable dynamics of capital inflow.
The problems in the global economy, however, are still present, and lately
the risks of slow-down and probability of the second wave of the crisis become
more likely. As a result the growth rates of the global economy were revised
downwards (towards decline scenario). In this regard, the issue of economic
development of the CIS countries in the mid-term perspective remains open.
Nowadays, most indicators show global economic slowdown. Obviously, it will
result in the economic slowdown in the CIS countries.
In the mid-term perspective, the most serious risks for the states exporting
energy sources present the price fluctuations on hydrocarbons.
The IMF in its January report “World Economic Outlook” deteriorated its
forecasts by the rates of economic growth in the CIS countries for 2013-2014. In
2012 the economic growth in the CIS counted for 3.6% and growth of the global
GDP for 3.2%.
According to the IMF evaluations GDP growth in the CIS in 2013 counts for
3.8% (October forecast – 4.1%), in 2014 - 4.1% (October forecast – 4.2%). On the
whole in 2013 the global GDP growth is anticipated (IMF estimates) at the level of
3.5% (October forecast – 3.6%), for 2014 – 4.1% (October forecast – 4.2%).
Accordingly, it is supposed that the CIS countries in general will
demonstrate more rapid rates of economic growth unlike world average.
1.2. Energy market, balance of energy consumption
The CIS possesses substantial capacities to develop the fuel and energy
sector. To date, the collective energy potential of the CIS member states counts for
10% of global oil reserves, more than 31% of global gas reserves and 27% of coal
reserves. Herewith the CIS member states consume about 80% of the extracted
natural gas and coal, less than 50% of oil. Consequently, the export potential of the
CIS countries is quite substantial.
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The CIS member-states have a great potential of energy saving, which
according to experts` estimations amounts from 420 up to 450 million tons of oil
equivalent. Currently, energy intensity of some CIS countries exceeds 3 or 3.5
times the level of industrially developed countries. The highest levels of GDP
energy intensity are recorded in Kazakhstan, Turkmenistan, Uzbekistan, and
Ukraine.
On the whole, in 2010 CIS have produced 645 billion tons of oil (up by
2.2% as compare with 2009). Major countries oil-producers in the CIS are Russia
(78% of total production in the CIS), Kazakhstan (12%) and Azerbaijan (about
8%).
Oil production increased up by 9.2% as compared with 2009 and amounted
784 billion cubic meters of gas. Russia ranks first in production of natural gas
(82.8% of production in the CIS) simultaneously being the largest exporter of it.
The second largest gas producing country in the CIS is Turkmenistan. Uzbekistan
produces more moderate volumes of gas.
Coal production in the CIS in 2010 counted for 510 million tons, what is
6.9% more as compared with the previous year. Main producers and consumers of
coal in the CIS are Russia, Kazakhstan, and Ukraine.
The share of atomic power stations (APS) in the total power generation in
the recent years counted for more than 40% in Armenia, about 16% in Russia and
approximately 48% in Ukraine. On the whole, the share of nuclear power used in
the power generation in the CIS is approaching to 18%.
Analysis of changes in the production and consumption of primary energy
sources (PES) in the period from 1990 to 2012 showed that generally the CIS
member states by collective production of energy sources in 2012 exceeded the
level of the year 1990. At the same time, in the CIS generally the need for primary
energy sources 1990 – 2012 decreased by almost 23%.
The Institute of Strategic Studies of the Russian Academy of Sciences
jointly with the CIS Executive Committee in 2009 elaborated the forecast of
energy production and consumption by the CIS member-states for the period up to
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2020. It is coordinated with the forecasts for development of World’s energy sector
and with integration programs in the CIS (EurAsEC, SCO).
The Baseline Scenario is designed on the basis of national forecasts for
economic development and energy sector of the CIS Member States (table 1).
In general, the Baseline Scenario of energy production and consumption by
the CIS Member States is characterized by rapid growth rates of production of
primary energy sources(1.39 times), including production of natural and associated
gas (1.38 times), coal (1.36 times), oil (1.27). According to the Baseline Scenario
the power generation in the CIS countries will increase 1.49 times (figures 1 and
2). The most rapid growth rates in the CIS are anticipated in gas production
industry which is mainly determined by increase of export. For the given period a
leading role in this branch will be played by Kazakhstan, Russian Federation,
Turkmenistan, and Uzbekistan and later by Azerbaijan. By the end of the given
period the share of Russia in the production structure of oil and natural gas will be
decreasing mainly due to the increasing share of Central Asian countries. Over the
given period the CIS member states will be increasing their potential of oil and gas
export, while the capacities for coal export will decline because of increased
demand for internal consumption in the CIS member states, primarily for power
generation. Export potential of electric power industry in the CIS member states
will increase due to growing demand for electric power mainly in the Asian
markets.
Table 1.The balance of production and consumption of the primary energy resources of the Member
States of the CIS within the Baseline scenario.
Member States of the CIS
Primary Energy Resources Tons of oil equivalent
2008 2009 2010 2015 2020
Production of primary energy resources
Azerbaijan 59.5 78.4 90.5 104.6 95.4
Armenia 1 1.1 1.2 1.5 2
Belarus 3.8 3.9 3.9 5 6.6
Kazakhstan 151.8 148.6 161 226.1 268.5
Kyrgyzstan 1.4 1.7 1.9 2.9 3.6
Moldova 0.1 0 0 0 0
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Member States of the CIS
Primary Energy Resources Tons of oil equivalent
2008 2009 2010 2015 2020
Russian Federation 1289.11 1284.3 1295.8 1361.3 1460.5
Tajikistan 1.5 1.9 2 3.6 4.7
Turkmenistan 70.2 82.8 95.4 136.2 168.8
Uzbekistan 61 62.4 64.9 68.7 72.4
Ukraine 78.2 75.8 75 114.5 124.6
Consumption of primary energy resources
Azerbaijan 14.6 15.58 16.3 18.62 20.61
Armenia 3 2.94 3.01 3.33 3.86
Belarus 27.4 27.9 28.3 30 32.1
Kazakhstan 59.3 60.67 64.42 75.77 79.95
Kyrgyzstan 2.7 3.14 3.2 4.09 4.6
Moldova 3.3 3.92 3.98 4.75 6.44
Russian Federation 715.7 677.58 681.88 726.56 768.66
Tajikistan 3.2 3.82 3.88 4.28 5.52
Turkmenistan 22.3 19.89 20.66 21.76 23.83
Uzbekistan 46.1 44.66 43.63 43.97 43.01
Ukraine 134.1 147.66 153 163.84 175.66
Figure 1. Dynamics of energy resources production in CIS. Baseline Scenario.
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Figure 2.Dynamics of energy resources consumption in CIS. Baseline Scenario.
The Baseline Scenario retains the tendency of economic development of the
CIS countries by means of considerable increase of consumption volumes of fuel
and energy resources, a low level of usage of alternative energy, high level of GDP
energy intensity in comparison with industrialized countries.
Summing up the forecasts of energy source production and consumption
balances of the CIS member states in accordance with the Baseline Scenario one
may say that it retains the tendency of economic development of the CIS countries
by means of considerable increase of consumption of fuel and energy resources
and underuse of alternative energy.
The Baseline Scenario assumes the tendency established in the 2000 – 2008
of direct dependence of the economic growth (with the growth of the population
prosperity) and energy consumption levels in the CIS member states. In the
majority of the CIS countries this will be happening due to electric-power industry
(increase of electric power consumption demands extra fuel consumption for
power generation) and domestic sector.
The change in the structure of the energy balances of the CIS countries in the
given scenario goes on moderately which slightly modifies the structure by the end
of the period under review.
The feasibility of the objectives set in such Scenario is confirmed by the
levels of development of fuel and energy sectors, covered by national programs, by
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the forecasted balance sheets of mutual trade between of the CIS member states
and prospects for energy recourses export.
The Energy Efficient Scenario is viewed as an alternative one.
The Energy Efficient Scenario is based on the forecast of decrease, in
comparison with the Baseline scenario, in domestic demand for energy resources
in the CIS member states due to intensive energy saving policy. Environmental
issues were also taken into account and viewed as the highest priority. The
supposition was made that levels of extraction and production of energy resources
in the CIS member states remain equal to the Baseline Scenario (table2). Thus,
there were considered the possibilities of the export potential growth of the CIS
member states through the increase of the energy saving and improved energy
efficiency. In the present scenario one may observe the 6-7% decrease in organic
energy consumption if compared to the Baseline Scenario.
Intensive energy saving policy based on the experience of advanced
industrial countries provides the opportunities for the CIS member states of more
effective utilization of fuel and energy resources through priority investments into
research-and-development and design-and-engineering projects as well as into
implementation of new technologies. The scenario involves is the secured
provision of innovation-based development in all sectors of economy of the CIS
countries and their competitiveness on the market.
Table2. The balance of production and consumption of the primary energy resources of the CIS
countries within the Energy Efficient Scenario.
Member States of the CIS
Primary Energy Resources, tons of oil equivalent
2008 2009 2010 2015 2020
Production of primary energy resources
Azerbaijan 59.5 78.4 90.5 104.6 95.4
Armenia 1 1.1 1.2 1.5 2
Belarus 3.8 3.9 3.9 5 6.6
Kazakhstan 151.8 148.6 161 226.1 268.5
Kyrgyzstan 1.4 1.7 1.9 2.9 3.6
Moldova 0.1 0 0 0 0
Russian Federation 1289.11 1284.3 1295.8 1361.3 1460.5
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Member States of the CIS
Primary Energy Resources, tons of oil equivalent
2008 2009 2010 2015 2020
Tajikistan 1.5 1.9 2 3.6 4.7
Turkmenistan 70.2 82.8 95.4 136.2 168.8
Uzbekistan 61 62.4 64.9 68.7 72.4
Ukraine 78.2 75.8 75 114.5 124.6
Consumption of primary energy resources
Azerbaijan 14.6 15.58 16.3 18.62 20.61
Armenia 3 2.94 3.01 3.33 3.86
Belarus 27.4 27.9 28.3 30 32.1
Kazakhstan 59.3 60.67 64.42 75.77 79.95
Kyrgyzstan 2.7 3.14 3.2 4.09 4.6
Moldova 3.3 3.92 3.98 4.75 6.44
Russian Federation 715.7 677.58 681.88 726.56 768.66
Tajikistan 3.2 3.82 3.88 4.28 5.52
Turkmenistan 22.3 19.89 20.66 21.76 23.83
Uzbekistan 46.1 44.66 43.63 43.97 43.01
Ukraine 134.1 147.66 153 163.84 175.66
The combination of social, economic and technological factors (the growth
of GDP, the population living standards, unrealizable potential of energy saving)
predetermines the increase of demand for energy resources in almost all CIS
countries while the change in the pricing environment in the energy resources
trading has not yet allowed to change the present tendency towards the expansion
due to the demand lag.
The diversity in the energy resources production and consumption structures
is the objective basis for the expansion of energy resources trading and mutual
integration of the CIS countries in the energy sector.
The energy resources export capacity (first of all in terms of natural gas) of
the CIS countries calculated until 2020 is fairly high with due account for the intra-
regional trading and it can still be expanded through the realization of the
increasing energy efficiency programs in all CIS member states.
Natural gas ranks high in the energy balances of almost all CIS member
states. In the majority of the CIS countries (experiencing power shortage or excess)
the programs, which aim to reduce the share of gas in the energy mix not only by
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means of energy savings, but also by its replacement with other types of energy
sources, appear.
Current inefficient use of energy resources predetermines the decrease of the
energy intensity levels of all CIS countries which makes it possible to bring the
mentioned indicators closer to the standards of the developed countries. More
vividly it can be traced in Energy Efficient Scenario (by means of intensification of
energy saving programs) and “Excessive” Scenario of development (by means of
acceleration of economic growth and structural energy saving).
1.3 Analysis of the CIS countries policy in the energy saving area
As a whole by now many CIS countries are concerned about the high rate of
GDP energy intensity which exceeds approximately 2-3 times the indicators of the
GDP energy intensity in the developed countries. The governments became aware
of the importance of formation and realization of national policy in the energy
saving area and improving the energy efficiency.
Considering the significant diversities in the structure of national economies
and resource endowment, the policy priorities in the area of improving the energy
efficiency and use of renewable sources of energy and approaches to its realization
differ.
It is important to note that up to present the national energy markets in the
CIS countries have not been completely formed. There is governmental regulation
of prices on energy sources and tariffs on the services of natural monopolies. In
this context, energy efficiency is of great importance from the point of view of the
population and economy energy supply with reasonable tariffs as well as from the
point of view of market reforms to reduce the amount of cross-subsidization.
All the CIS countries can be divided into two groups: countries mainly
importing the hydrocarbons and countries exporting these types of hydrocarbons.
To the first group Armenia, Belarus, Kyrgyzstan, Republic of Moldova, Tajikistan,
and Ukraine could be ascribed, to the second one –Azerbaijan, Kazakhstan,
Russian Federation, Turkmenistan, and Uzbekistan.
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Countries, depending on oil and gas imports generally need pay much more
attention to the measures aiming to improve the energy efficiency and promote
rational use of energy sources since they buy them on foreign markets at the world
prices or close to them. Exporting countries to a lesser extent suffer from high
energy intensity of the economy as they can allow themselves to determine the
prices in the domestic market, considerably lower than world prices and thereby
increasing competitiveness of the products and reaching the objectives of the social
and economic development.
Countries, relying on energy resources import mainly earlier designed an
appropriate legal and institutional framework necessary to reach the objectives in
the sphere of improving energy efficiency and energy saving. The main goal of
such policy in this group of countries is lowering of GDP energy intensity with the
purpose of ensuring the energy security and improving the structure of the fuel and
energy mix, reduction of dependence on imported energy sources, increase of use
of available in the country fossil fuels and renewable energy sources.
Generally in all CIS countries, excluding Turkmenistan and Azerbaijan,
there are laws on energy saving in force, the legal framework of energy saving is
formed or is in the process of formation and aimed to ensure the basis for
implementing the policy of effective use of energy sources: there are laws coming
into force on improving energy efficiency and energy saving, there are adopted
strategic documents on development of the national economies which reflect the
goals and objectives in the area of improving the energy efficiency. There were
also designed the national programs and action plans, formed particular sectoral
and specialized programs in accordance with the national priorities.
By the same token, in some states the legal base can be defined as just
“declarative”. In the majority of countries the laws on energy saving do not
propose the mechanisms of direct action and are loosely connected with other
legislative acts regulating various energy issues and ecology. The norms of the
energy legislation often are not coordinated between each other; there are gaps and
unresolved issues. Moreover, almost all countries actively study international
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experience and there are efforts being done to adjust it to the national conditions
and priorities. In particular, noteworthy are the tendencies in harmonization of the
legislation in the sphere of energy efficiency with the EU legislation.
In the majority of states under review there is lack of a complex and
consistent approach to realization of the policy on improving energy efficiency. As
a rule, a mechanism of monitoring and assessment is absent or underdeveloped.
There is no fully organized system of collecting statistical data, no mechanisms of
correction of the mid-term objectives and mechanisms of their achievement, there
is no fully developed system of subordinate normative legal acts and standards, as
well as no mechanisms of economic stimulation of investments into energy
efficiency worked out in practice.
Major impediments to introduction of energy saving enterprises are the
imperfection of the tariff policy and the practice of cross-subsidies,
underdevelopment of ESCO and energy saving technologies, uncertainty regarding
the budgetary support of energy efficiency in the perspective, high investment
risks, low level of qualification of the local management, insufficient level of
culture in rational use of energy sources, insufficiently developed system of market
relations, absence of efficient economic incentives for drawing investments into
main productive assets and for the implementation of energy saving projects,
imperfection of governmental regulation in the area of energy saving, particularly
on the regional and local levels.
Indeed, very often there is lack of real policy regarding the population,
which could further the energy saving and use of alternative sources of energy in
the housing sector. Existing mechanisms of state policy do not always suffice for
overcoming aversion by the economic agents of innovative technologies in general
and of energy efficient technologies in particular. There is no appropriate
infrastructure of energy market and energy efficient technologies, no formed
sources or not fully practiced in action the mechanisms of financing the energy
efficient projects. The cornerstone in implementation of investment projects
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remains unpreparedness of the population and of authorities to wait for a couple of
years the return of investments.
The common weak point is uncertainty in the regulatory environment in the
sphere of heat supply and other infrastructural spheres of housing and utilities
services, directly related to the service of population, functioning in the conditions
of merely absolute absence of good coordination of rules and price setting which
have to a considerable extent a subjective non-economic nature and oriented
mainly to the preservation of social stability and not to economic results. Actual
absence of the long-term tariffs virtually excludes any long term and serious
activities on energy saving and even more on energy efficiency.
The most successful countries, in which along with the thoroughly designed
legal base and necessary institutional framework (extremely important is the
presence of an independent body of state regulation in charge for energy saving).
Another necessary prerequisite is the clear goal setting and planning (with defining
of key indicators that are planned to achieve until specified time), as well as
creation of the system of monitoring of results in the implementation of national
policy in energy efficiency. Besides, even in the presence of the system of
economic incentives, at the first stage of energy efficiency policy implementation
the leading role plays the budgetary funding of energy efficient projects.
It could be noted that best results in energy saving were achieved by Belarus,
that has been undertaking a more complex and consistent approach in energy
efficiency since 1995 and the key principle of which is ensuring energy security
through improvements of the fuel mix while using energy resources rationally and
integrating local types of fuel (non-imported) and RES as well as of energy and
eco-efficient technologies in all in sectors of economy.
Apart from GDP growth and reduction of energy intensity of the economy
(more than two times as compared to the level of 1997 – a year of stabilization and
economic recovery) the level of total energy consumption did not considerably
change. This is the case for almost all sectors of the economy. Currently, energy
intensity of economy is 1.4-1.8 times lower than in the Russian Federation,
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Ukraine, Kazakhstan and other countries of the former Soviet Union, but is still
1.5-1.8 times higher than in average in the European countries.
The implementation of programs and activities to realize the state policy
allowed to raise the share of domestic energy sources in the mix of heat and
electricity production from 2.8 % in 1990 up to 25% in 2012.
Ukraine also achieved a substantial progress in energy efficiency. It
designed multi-tier legal framework and worked out long-term and mid-term plans
and the system of target and intermediate indicators, established an institutional
framework and a system of monitoring and assessment of realization of complex
and specific sector programs.
The Russian Federation in the recent 6 years established an integrated
system of energy efficiency improvement and now the main task of the state policy
in the field of energy saving, among others, is practicing in action of all
mechanisms of the system.
The policy of other states in the sphere of energy efficiency improvement is
less complex and consistent and focuses mainly on their top priorities.
CIS countries also pay much attention to use of renewable energy sources
(RES).
1.3.1 Main goals and objectives
The concept of energy security in the Republic of Belarus assumes 12
indicators among which the GDP energy intensity by PPP is one of the most
important.
Currently Belarus works to achieve the following objectives:
reduce GDP energy intensity as compared with the level of 2005 no
less than 50% in 2015 and no less than 60% in 2020;
reach the total level of saving of FERs with comparable GDP over the
period 2011 - 2015 by no less than 7.1 – 8.9 million tons of fuel equivalent and by
no less than 5.2 million tons of fuel equivalent over the years 2016 – 2020;
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ensure the share of domestic energy sources in the mix of the boiler
and furnace fuel – 30% by 2015 and 32% by 2020.
These targets are planned to achieve through realization of activities on
energy saving, aimed at improvement of the economy structure, introduction of
modern energy-efficient technologies and equipment, development of economic
and organizational mechanisms of stimulation of energy saving measures, system
of metering and control of energy consumption, energy audit of organizations and
branches of industry, raising the energy efficiency by means of standardization,
broadening of the spectrum of research studies.
Belarus faces the rise of demand and supply on the market of energy
efficient technologies and equipment. There is need for the services on project
management and implementation of turnkey construction projects, conduct of
energy examinations on the enterprises.
By now, in accordance with the action plan, defined by the Strategy of
development of the energy potential in Belarus, the Government actively
undertakes measures to improve the tariff policy by means of step by step
optimization of the tariff system on energy, creation of economic incentives to
promote the use of energy saving technologies in action and stimulate the
consumers to save energy; stage-by-stage removal of cross-subsidies from the
tariffs on energy, including tariffs for the population.
The strategy on energy potential development of the Republic of Belarus
determines a complete stage-by-stage removal of cross-subsidies in the tariffs on
energy in Belarus by 2014-2015.
The main goals of Ukraine at the current stage are:
1. Reducing the level of GDP energy intensity by 2015 by 20% as
compared with 2008 (annually by 3.3%), improving efficiency of the
use of FERs and improving the competitiveness of the national
economy;
2. Optimization of the energy mix structure of the country in which the
share of energy from renewable and alternative types of fuel must count
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for no less than 10% by 2015 through reducing the share of imported
fossil minerals, particularly natural gas, by its substitutes from
alternative energy sources, including secondary sources.
In the frames of reaching the given tasks Ukraine aims to achieve:
substitution of the natural gas in the energy mix, from 2016 by no less
than 15 billion of cubic meters, oil products – 1 million tons;
raising the level of heat supply of the population and reducing the use
of the natural gas to produce the heat for housing sector by 60%, budget-
financed organizations – 35%;
reducing by 50% of the state budget expenditures for financing of the
public utilities and energy supply of the budget-financed organizations;
reducing by 25% the consumption of the imported natural gas;
reducing by 20% the level of energy intensity of the works on
transportation, storage and distribution of the gas as compared with 2008,
raising the reliability and energy efficiency while transiting the natural gas
through the mainline gas pipelines;
reducing by 15-20% the volumes of use of the natural resources by
means of decrease of the volumes of FERs consumption;
A turning point in the sphere of energy efficiency improvement is expected to
be the adoption of the National action plan on energy efficiency until 2020 by the
State Agency of Energy Efficiency and Energy Saving. Design and approval of the
National plan is one of the commitments by Ukraine to the European Energy
Community. The main goal of the Action plan is increasing the energy efficiency
by 20% until 2020 and the use of renewables up to 11%. The general task of the
Plan is reducing the use of energy at the national level to 9% from the average
volume of final consumption, or 6.23 million tons of oil equivalent.
Moldova also pays great attention to energy saving: effective use of FERs is
one of the most important points in strategic programs related to energy, transport,
and economic development in general.
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There had been worked out long-term and mid-term plans, established the
priorities, tasks in main sectors, and formed the system of target indicators of
energy saving:
1. in the electric power sector – stimulation of investments into power generation,
including from RES, and encouragement of the use of energy products and
household appliances conforming to the EU standards; reducing the losses in
the grids of power distribution from 13% in 2011 to 7-10% in 2020, what
requires an annual loss reduction in the amount of 0.52 – 0.82%;
3. in the heat and power sector – reducing the losses in the transport and grids of
power distribution and promotion of new energy efficient technologies,
appliances, and equipment for heat supply;
4. in the natural gas sector: work out of the National program of gasification
through the prism of capacities of the renewable energy sources and the
potential and capacity of the use of biogas in public buildings;
5. in industrial sector – stimulation if investments in industry of re-equipment of
technological appliances with a low coefficient of efficiency and the use of
energy efficient appliances, utilities and technologies;
6. in the building sector – development of the administrative, legal and financial
capacities for the complex measures on raising the energy efficiency in the
housing sector and encouragement of investments by the government and
private sector in the area of energy efficient buildings;
7. in the transport sector – spurring the use of biofuels as a component for the
conventional types of fuel and encouragement of effective of tires regarding
the fuel consumption; reducing of the fuel consumption by electric and railway
transport by substituting old transport units with more energy efficient ones;
8. in the public sector – introduction of the programs on improving street
lightning, construction of the buildings with low and close to zero level of
consumption, use of RES for heating the socially important objects;
Armenia`s goal is to reduce annual electricity and natural gas consumption to
1 TWh and 600 million cubic meters respectively. The plan focuses on increasing
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the energy efficiency in the municipal, commercial, and housing sectors, as well as
in industry and transport, and what worth noting is that it assumes finding form the
state budget.
Armenia also managed generally to overcome such barriers of increasing
energy efficiency as subsiding of the energy tariffs and the absence of metering of
energy and gas consumption.
The most important policy priority of Tajikistan in the sphere of energy
efficiency is the use of renewable energy sources and reducing the use of non-
renewables (fossil fuels), improving the investment climate in energy sector by
means of increasing energy tariff payments to the level, ensuring reimbursement of
expenses related to the energy production and supply, as well as investments into
energy sector.
A greater attention is also paid to the issues of reliability and sustainability
of energy supply to the population of isolated and remote regions of the republic,
as well as of small and medium-sized businesses.
The lack of generating capacities and the need for the solution of social
problems prompted the Government of the Republic of Tajikistan to transfer from
1 October 2009 all the budget-financed organizations, industrial enterprises,
commercial organizations and the population to the use of energy saving light
bulbs. 241,000 of low-income households were provided with energy saving light
bulbs subsidized from the national budget. The result of this action was a reduction
of daily consumption of electricity in the country by 78 million kWh.
It is also noteworthy that the reforms assume the financial rehabilitation of
the branch by means of introduction of payments discipline and raising the tariffs
on energy. The most important activity at this stage is the need for changes in the
existing legislation to create an independent regulation body in the electric power
sector and reforming the tariff policy to allow private sector to participate in the
further stages of the restructuring process.
Kyrgyzstan in general is preoccupied with the similar tasks to achieve by
2014-2015 the financial and economic recovery of energy sector, to introduce new
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generating and transmitting capacities, to increase the renewable energy share in
the structure of power generation, to improve the energy efficiency by means of
energy saving, to ensure the energy supply of the users and to conduct socially
acceptable tariff policy.
The main objectives of energy saving policy in the republic are: rational use
of energy while it is being produced and consumed through the active introduction
of energy saving and innovative technologies, as well as the use of renewable
energy sources.
The structure of consumption of FERs in the recent 20 years has seen a
considerable increase of housing sector share and the decrease of the industrial and
agricultural sectors’ shares. Currently the population consumes about 60.5% of all
electricity in the domestic market; public sector – 10.5%; industry, agriculture and
the private sector – 29%.
The structure of the fuel and energy mix also witnesses considerable
changes: sharp decline of coal consumption and herewith heating, hot-water
supply, cooking are provided now by electricity use. Whereas the population in
1990 consumed 1 billion kWh, the year 2010 recorded 3.64 billion kWh of
electricity with regard to seasonal fluctuations: consumption volumes in winter
period are 3.5 times higher than in the summer period.
Tariffs that are currently in force in the Republic of Kyrgyzstan do not
stimulate the producers and consumers of energy to reduce energy expenses. In this
regard, there is need for amendments to the existing tariff policy in energy sector.
It is necessary to note that due to a range of political and economic reasons
Moldova, Kyrgyzstan, Tajikistan, Armenia later than Belarus and Ukraine
managed to start the policy implementation to improve energy efficiency.
A group of countries-exporters of oil and gas started to design the policy in
the sphere of energy efficiency later than other countries which do not possess own
great hydrocarbons` resources. Moreover, at the current stage the governments of
these countries realize that along with other positive results, improvement of the
energy efficiency makes it possible to reveal an additional volume of resources for
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the export, to optimize the generating capacities and to reduce the environmental
burden.
Russia recently started to work out and implement the policy in the area of
energy efficiency – main part of the legal base was worked out during last 6 years.
But energy saving became one of the most important priorities in economic
development and international experience has been examined and taken into
account in national policy shaping.
Presently, Russian GDP energy intensity is approximately 7 times higher
than in Japan and 4.5 times higher than in the United States. In the housing sector
the Russian standards of heat and water consumption are 3 times (sometimes 4-5
times) higher than in Finland and Norway.
Russia`s energy saving policy is consistent and systemic and is ensured apart
non-budgetary sources also through the budgetary finding. It is noteworthy that
annual expenditures of the federal budget for implementation of the State Program
of the Russian Federation “Energy Saving and Improvement of Energy Efficiency
until 2020” are 7 billion Russian rubles (for the period 2011 -2013).
The main goal of Russia in the sphere of energy saving is the reduction until
2020 of GDP`s energy intensity of the Russian Federation for no less than 40% as
compared with 2007. These saved resources are supposed to become the main
energy source for economic boost.
At the current stage Russia determined main goals and objectives, the
instruments of regulation and stimulation of energy saving. In the process of
establishment are the system of state regulation in energy saving and the market of
corresponding services and technologies. There has been also assumed the design
of the system of indicators to assess the results in the sphere of energy efficiency,
as well as the establishment of the system of regular monitoring and assessment.
Analysis of the basic principles of the Russian policy in the sphere of energy
efficiency improvement, with regard to the development of the real sector of the
economy, shows that the Russian Federation even with a considerable lag, sets for
itself the tasks similar to the tasks in other countries-leaders in energy saving.
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Federal, regional and municipal budgets of the Russian Federation assume
significant allotments for realization of energy saving activities. Significant
funding are offered by Russian and international financial organizations. Apart
from that, the given funding considerably remains not high-demanded due to the
insufficient development of specific mechanisms of financing (for instance the
mechanism of providing with the state guarantees). Moreover, the financial risks
also have a great affect which are caused by the administrative barriers, instability
of economic climate and blurriness of the legal base what does not make it possible
to forecast the time frames and feasibility of investments return and respectively to
attract private investments.
As a result of absence of clear guarantees of reimbursement of expenses
there is no interest in energy saving among the majority of companies and potential
investors. Noteworthy, there is no agreed mechanisms allowing to distribute the
funding resulted from realization of energy saving projects. At present it is difficult
to get profit from energy-saving projects implementation.
There has been established the Federal ESCO (FESCO) as well as more than
100 other ESCOs. Nevertheless, in practice there are no mechanisms of realization
of energy performance contracts and the ESCO market develops slowly.
The financial part of energy saving and energy efficiency also remains
underdeveloped (in legal aspects). Presently, there is absence of practically
efficient methodological and normative documents on defining and fixing the
established effect (economic profit). The enterprises are not prepared to invest for
the modernization, there are no methodological and normative rules on receiving
financial assets as a result from realization of energy saving projects, there is no
practice of the monitoring mechanism to prove the economic profits after
implementing the projects, there is lack of bookkeeping rules of fixing the saving
results on the systematic basis and of its differentiated accounting and
accumulation. There is also absence of adopted and legally binding rules to define
the period of charging the savings and definition of a comparison base.
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The desire of energy suppliers and ESCOs to invest into energy efficiency
remains very low at the same reason, particularly when the payment discipline of
consumers is low and probability of reimbursement of expenses from energy
saving investments through the tariffs is also low.
Another institutional barrier is the imperfect organizational structure of the
housing sector and consequently inadequate management, services and
maintenance of the housing infrastructure.
Involving the population`s finances to improve energy efficiency of the
housing sector is impeded by the traditional mentality along with immaturity of
mortgage markets that do not make it possible normal functioning of the credit
system and loan agreements. The commercial credit institutions usually attribute
the borrowers from the housing sector to the high risk group and thus do not give
loans to such borrowers, especially to the apartment buildings` residents who
mostly need such types of loan.
The situation is exacerbated by the fact that the level of the minimum cost of
living increase faster than levels of income and some families cannot pay for the
municipal bills and to undertake some primitive measures for energy efficiency.
Unreasonably low energy prices also cause very long and unattractive payback
periods. Stimulation of resource savings in the public sector is hampered by the
existing mechanism of budget planning.
The intermediate results of the State program realization show that in Russia
there is lack of sufficient and complex legal base and technical assistance to save
energy. In many sectors of the economy the investors cannot receive and make use
of savings from investments into energy saving.
Kazakhstan lately has declared that energy saving and improvement of
energy efficiency is one of its priority tasks. It has been established, that energy
saving and improvement of energy efficiency could allow Kazakhstan to save the
FERs in the amount of 20-30 million tons of fuel equivalent over the period 2011 -
2015.
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Kazakhstan`s goal in energy saving area is to reduce GDP energy intensity
by no less than 10% until 2015 and by 25% until 2020 respectively.
Presently the country is characterized by quite low prices as compared with
world`s prices on FERs. Because of the low level of the tariffs during the period
1998-2008 the volumes of reconstruction and modernization of existing power
stations were 3-4 times lower than necessary for their maintenance in action, and
new generating capacities were nor established or brought into force.
For the purpose of finding the solution in 2009 there has been brought into
force the system of the maximum tariffs established by the Government for the
electric power stations for the period of no less than 7 years (2009 – 2015) with
regard to the volume of investments needed for their reconstruction and
modernization. In this regard, the maximum tariffs for various price groups were
established within a quite broad spectrum (for instance in 2012 from 3.63 to 7.9
tenge for kWh).
It is planned that the tariffs for electricity after 2015 will be released.
It is assumed that by 2030 the level of electricity consumption in the country
with regard to the target indicators on reducing GDP energy intensity will amount
in 145 billion kWh per year, and the level of electricity production should reach
150 billion kWh.
To achieve this task until 2030 there is plan for realization of activities on
reconstruction, modernization of existing and construction of new generating
capacities with total capacity 11,603 MW. These activities will be implemented on
the basis of modern and highly effective and eco-friendly technologies with the
rise of efficiency coefficient of the electric power stations (modern condensation
electric power stations have the coefficient of efficiency up to 45%, gas-fired - up
to 65%).
Nevertheless, the base of the country`s energy sector should remain steam
power plants working on coal but in the structure of the generating capacities in
Kazakhstan by 2030 the share of electricity from RES will be considerably
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increased (up to 15%) in accordance with modern trends in the world energy as
well as cleared up the feasibility of constructing new atomic power plants.
Electricity consumption and specific fuel consumption for electricity
generating and heat supply in the republic exceed on average the level of the
advanced countries by 25-30%. Energy saving potential in energy sector is
estimated in amount of 16 million tons of fuel equivalent per year.
For the moment there is a great need for the modernization of the equipment
almost in all sectors of industry. Deterioration of the capital funds in metallurgy
and chemical industry is more than 60%, in the mining industry – 50-55%, in
machinery construction – 35-40%.
The energy intensity of industrial sector of Kazakhstan is 5 times higher than
the similar indicator in the EU. By various estimations, the energy saving potential
in industry amounts 25-39% of total energy consumption and exceeds10 billion
kWh.
Currently the housing sector consumes about 40% of heat energy supplies.
According to experts’ estimates about 70% of buildings have the heat
characteristics which don’t conform to the modern requirements (especially this
relates to the buildings constructed in 1950 – 1980) because of which they loss
through the walling constructions up to 30% of the energy used for heating. The
reason of high heat consumption is deterioration of the housing fund.
The considerable share of public organizations (schools, hospitals etc.) and
the housing buildings are equipped with ineffective energy systems and require the
renovation. The public organizations consume about 5% of electricity and about
15% of heat energy produced in the country. The undertaken studies show that in
various budget organizations intensity of use coefficient differs and exceeds the
norms even in the organizations of similar structure.
The municipal sector of the country is also characterized by high level of
grids deterioration and by considerable extent of energy losses during the
transportation and consumption. The majority of buildings and grids in the
communal sector were constructed or been modernized more than 20 years ago. In
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the whole, with regard to the normatively prescribed time frames of safe
exploitation during 25 years, about 63% of the grids require the capital
refurbishment or their absolute substitution.
In this regard the most reasonable measures of the national policy on
improvement of energy efficiency in Kazakhstan are:
1. stimulation of energy saving and improvement of energy efficiency
including the use of energy saving products and technologies;
2. introduction of limits for the circulation and the use of technologies and the
products with low energy efficiency as well as the requirements for energy
efficient constructions, buildings and housing equipment;
3. obligations of conducting the energy examinations and expertise of energy
saving and improvement of energy efficiency for a particular category of
sites;
4. organization of metering and control of the produced, distributed and
consumed energy sources;
5. conducting measures of state control and monitoring the effective and
rational use of energy sources;
6. performance of the balanced tariff policy and price-setting in the sphere of
production and consumption of energy sources with regard to state interests
in rational use of energy resources;
7. implementing the energy management system.
In Uzbekistan the energy saving should also become one of the most
important priorities in the energy sector of the country since it makes it possible to
reduce the needs of substantial investments into energy sector. Unlike the previous
orientation to the building up of the large scale energy production, the most
important priority of the branch is raising the efficiency of energy use of the
current equipment.
In this regard the priority directions of energy sector development are
defined as follows:
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technical re-equipment, reconstruction and modernization of energy
appliances aimed at preservation of the installed capacity of power stations,
improvement of their technical and economic indices;
Introduction of modern and highly efficient technologies and electronic
appliances allowing to save fuel and energy resources and to reduce the
environmental and ecological burden.
The main goals of the country in the area of energy efficiency are:
− reduction of the final energy consumption for satisfying a particular
volume of the demand;
− improvement of the efficiency of using the energy sources and
improvement of the system “extraction-transformation-distribution-
consumption” at each of these stages;
− substitution of expensive and limited energy sources with the cheaper
and renewable ones;
− applying the advanced technologies that promote energy efficiency
while satisfying ecological requirements;
The main tasks of the system of state regulation in implementing energy
saving at the current stage are:
creation of the respective legislative and methodological base that will
stimulate the realization of the energy saving measures;
providing conditions for the legal and economic interest;
defining the level of enterprise`s efficiency in using the energy
sources and revealing the energy saving potential.
Taking into consideration the importance of the electric power industry in
the economy of the country there is growing interest from the President`s side and
from the Government to the branch. Particularly, in accordance with the Decree of
the President of the Republic of Kazakhstan dated 15 December 2010 № ПП-1442
“On Priorities of Development of the Industry of the Republic of Kazakhstan for
the period 2011-2015” the development priorities are:
35
1. framing the concrete, deep and comprehensive long-term perspective of
economic development in general and of energy sector in particular;
2. ensuring the stability of normative indices and tariffs with the purpose of
raising the competitiveness of the national industrial products and decrease
of dependence of industrial development in general on the world`s markets’
fluctuations;
3. further deep changes in the structural transformations of the economy aimed
at the leading development of the priority branches such as energy, oil and
gas industry, chemical, textile, light industry, nonferrous metallurgy,
mechanical engineering and automotive industry, pharmaceutics, high-
quality and profound processing of agricultural production, production of the
construction materials providing increase of role and place of the republic in
world division of labor, production of competitive goods with the high value
added, using steady demand in the world market;
4. implementation of large-scale modernization, technical and technological
updating of industrial productions, equipment by the most modern hi-tech
appliances, the accelerated implementing of modern scientific achievements
and progressive innovative technologies, expansion of preparation of highly
qualified personnel for the industry;
5. steady increase of the efficiency of industrial production at the expense of
increase of labor productivity, consecutive decrease in production expenses
and product cost, introduction of modern energy saving and resource-saving
technologies, improvement of the organization of production, elimination of
losses and unproductive expenses;
6. systemic implementation of the international quality standards and
technical regulations in the production of an industrial output.
In Azerbaijan and Turkmenistan energy efficiency policy as the separate
direction of a state policy doesn't actually exist. The legal and institutional bases in
fact aren’t created. At the same time, in these countries particular steps are taken
for optimization of the fuel and energy mix, for optimization of generating
36
capacities and development of renewable energy within the realization of the
energy policy.
In Azerbaijan particular attention is being paid to the issues of increasing
energy efficiency in industries and to improving the ecological situation.
Turkmenistan solves the task of increasing energy efficiency within the
plans on common modernization of economy and energy sector in particular, as
well as of renewable energy development. There are a lot of hard-to-reach areas in
the country where the centralized approach to power grids is complicated. The use
of RES and development of respective technologies is urged to solve this problem,
for example, on the remote distant pastures, oil and gas fields, on the islands of the
Caspian Sea.
Presently, Turkmenistan realizes together with the United Nations
Development Program and Global Environment Facility the project "Improvement
of Energy Efficiency in Residential Buildings of Turkmenistan" (2010 – 2015гг.).
The similar project is carried out in Turkmenistan for the first time. The budget of
the project makes up 46 million US dollars, the most part of which is provided by
national partners, such as the State Concern “Turkmengaz”, mayoralty of the city
of Ashgabat and the Ministry of Construction of Turkmenistan. The State Concern
“Neftegazstroy”, the Ministry of Energy and Industry, and the Ministry of
Municipal Services, and also the Polytechnic Institute of Turkmenistan are
involved into activities for the project.
The project includes two main directions – taking into account of the
principles of energy efficiency in the process of design, construction and service of
residential buildings, and rational use of energy in houses.
1.3.2. Legislative and regulatory base
Belarus, Russian Federation and Ukraine have a developed legislative and
regulatory base in the area of energy saving and energy efficiency improvement.
In the Republic of Belarus more than 30 legislative acts regulating the public
relations in the sphere of energy saving are in force, including the international
37
agreements related to the realization of the energy saving policy in Belarus. At
present the concept of a new Law of the Republic of Belarus "On Energy Saving"
is being developed.
The main strategic documents which are legally fixing the state policy in the
sphere of energy efficiency and energy saving are the following:
President`s Decree of the Republic of Belarus dated 11.04.2011 №136;
Directive No 3 of June 14, 2007 “Economy and Thrift are the Main Factors of
the Economic Security of the State”;
The Concept of Energy Security of the Republic of Belarus approved by the
President`s Decree of the Republic of Belarus № 433 of 17.09.2007;
Strategy of Development of Energy Potential of the Republic of Belarus
approved by the Decree № 1180 of 09.08.2010;
The National Program on Energy Saving for the period 2011 – 2015 approved
by the Decree № 1882 of 24.12.2010;
The National Program of Development of Local (domestic) and Renewable
Energy Sources for the period 2011-2015 approved by the Decree № 586 of
10.05.2011 and other special programs in the sphere of energy efficiency increase
and promotion of use local types of fuel and RES.
In Russia the main legislative acts in the area of energy efficiency and energy
saving are the following:
The Presidential Decree of 04.06.2008 № 889 'Concerning Some Measures
for Improving the Energy and Ecological Efficiency of the Russian
Economy' established the goal of decreasing by 2020 Russia’s GDP energy
intensity no less than by 40% as compared with 2007;
The Federal Law of 23.11.2009 № 261 "On Energy Conservation and
Improving Energy Efficiency, and Introducing Amendments to Certain
Legislative Acts of the Russian Federation";
other acts and the bylaws adopted, as well as the State Program on “Energy
Saving and Energy Efficiency Improvement until 2020”, approved by the
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Russian Government Decree of 27.12.2010 № 2446 and other respective
regional, municipal and corporate programs.
In Ukraine presently the Law on "Energy saving" remains the basic law
which regulates the relations in the energy saving area but at the same time there
are about 100 normative legal acts in the area of energy saving, and a significant
amount of standard and methodical documents. These acts and documents, directly
or indirectly having legal influence on the relations in the energy saving sphere,
allow to create the structure of public administration and control in the energy
saving sphere; to implement the rationing system of fuel and energy resources use,
concept of energy audit, the system of state examination of energy saving and
national standards of energy saving, to establish sanctions for violations of the law
in the energy saving area.
The principal documents in the area of energy efficiency improvement in
Kazakhstan, Moldova, Tajikistan and Armenia are national laws on energy saving,
in Uzbekistan – the law on rational use of energy.
In Tajikistan there a complex legislative base for development of renewable
energy and a small-scale power generation was created according to national
priorities of development which includes also norms, standards, and
methodological documents.
The approach of Armenia to the provision of the sources of funding the
energy saving activities should be noted. The Government of Armenia established
in 2006 the Fund of Energy Efficiency and Renewable Energy, which operates as a
revolving fund. Fund provides financing for energy saving projects via
mechanisms of cooperation with the banks and other credit organizations.
The energy saving policy of Kyrgyz Republic is regulated by laws of the
Kyrgyz Republic “On Energy", "On Electric Power Industry", "On Energy Saving"
and "On Energy Efficiency in Buildings".
Azerbaijan pays special attention to the development of alternative energy
and sets the task of harmonization of the national legislation in this sphere with the
legislation of the European Union.
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According to the information available in open sources, Turkmenistan
doesn't set an objective on development of the standard and legal base in the
energy efficiency sphere, however also pays serious attention to the development
of renewable energy.
1.4. Main institutions and organizations responsible for policy and programs
in the area of energy efficiency and energy saving
In Belarus the main institute responsible for the development and carrying
out the state policy in the sphere of energy efficiency and renewable energy,
monitoring policy realization and ensuring the state supervision of rational use of
fuel, electric and thermal energy, is the Department on energy efficiency of the
State Committee on Standardization of the Republic of Belarus.
In each ministry and in the regions there are administrations and the
committees responsible for the implementation of programs on energy saving,
achievement of the established indicators. Both state and private enterprises are
obliged to include into the business plans the targets and action plans on energy
efficiency which will allow to ensure the achievement of the established indicators.
There had been organized the system of monitoring of execution and of
reporting to the Department on energy efficiency of the State Committee on
Standardization. The Department on energy efficiency exercises control under
achievement of the established target indicators and actions for energy saving
about which the ministries, departments, executive committees (regional, regional,
and city) as well as the enterprises report to the Department. Then the Department
prepares the summary report for presenting it to the Council of Ministers.
The similar institutional structure acts in Ukraine. The principal body of
executive power in Ukraine on ensuring realization of a state policy in the sphere
of effective use of energy resources, energy saving, use of renewables and
alternative types of fuel is the State Agency on Energy Efficiency and Energy
Saving of Ukraine. Other authorities are responsible within the competence for
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development and implementation of sectoral programs of increase of energy
efficiency for 2010-2014.
In Russia the Ministry of Energy, the Commission of the President of the
Russian Federation concerning the strategy of development of the fuel and energy
complex and ecological safety, and the Governmental commission on questions of
fuel and energy complex, reproduction of mineral resources and increase of energy
efficiency of economy play the key role in policy formation in the area of energy
efficiency improvement.
Within the established field of activity of the Ministry of Economic
Development of the Russian Federation, the Ministry of Energy of the Russian
Federation, Ministry of Industry and Trade and the Federal Agency on
Construction, Housing and Communal Services, subordinated to the Ministry of
Regional Development of the Russian Federation, also carry out the following
functions:
monitoring and analysis of realization of a state policy and efficiency of
legal regulation in the field of energy saving and energy efficiency
increase;
organization and participation in the development and implementation of
programs, projects and actions in the field of energy saving and energy
efficiency increase;
development and realization of measures of the state support, and
stimulation in the field of energy saving and energy efficiency increase.
The state control (supervision) in the field of energy efficiency is exercised
by: Federal Service for Environmental, Technological and Nuclear Supervision,
Federal Antimonopoly Service and Federal Tariff Service, Federal Service for the
Consumer Protection and Welfare.
Public authorities in the regions of the Russian Federation and local
governments are also in charge of energy saving and increase of energy efficiency.
41
In Armenia the leading role in policy formation in the sphere of improving
energy efficiency is also played by the Ministry of Energy, in Azerbaijan and
Tajikistan – Ministry of Industry and Energy.
In Kazakhstan the policy in the field of energy efficiency and energy saving
is defined by the Ministry of Industry and New Technologies, however,
coordination, realization and monitoring of all the listed actions will be assigned to
an authorized body in the energy saving sphere, to local executive bodies and
Institute of Development of Electric Power Industry and Energy Saving
.Committee of the State Energy Supervision and Control of the Ministry of
Industry and New Technologies probably will act as an authorized body in the
energy saving sphere and also carry out the accreditation of energy audits and keep
the State energy register.
It is also necessary to note that there had been specially created the
Kazakhstan Institute of Development of Electric Power Industry and Energy
Saving. The purpose of the creation of this institute, regarding energy saving is to
carry out the analysis of a state of development of energy saving in Kazakhstan,
normative and technical provision in the sphere, etc.
In Moldova the Ministry of Economy act as the central administrative
governing body responsible for design of state policy in the field of energy
efficiency, and the Agency on Energy Efficiency (which is the body subordinated
to the Ministry of Economics)is implementing the state policy in the field of
energy efficiency.
In Uzbekistan the main regulating body in the field of electric power
industry is the State Inspection for Supervision in Power Industry
(Uzgosenergonadzor). Besides, the companies like the State joint stock company
"Uzbekenergo" and the National holding company "Uzbekneftegaz" are
responsible for the implementation of energy effective and energy saving
technologies in the relevant branches.
42
1.5. Existing programs in the field of energy efficiency and energy saving.
Planned programs in the field of energy efficiency and energy saving.
Azerbaijan now is working under the program on development of alternative
and renewable sources of energy till 2020.
In Armenia the main program document in the field of energy saving and
energy efficiency is the National program on energy efficiency and energy saving
of the Republic of Armenia.
The basic principles of energy efficiency proposed in the program are the
following:
1. identification of energy saving potential in all sectors of economy
and its realization;
2. increase in efficiency of using the fuel and energy resources in all
sectors of economy;
3. application of advanced technologies and work plans schedules for
consumers of fuel and energy resources;
4. ensuring availability of consultations concerning the effective use of
resources and products for consumers of fuel energy.
In Belarus the programs (republican, sectoral, regional) became the main
instrument for implementing the policy and strategy for energy efficiency.
Programs define the complexes of concrete actions, mechanisms of their
performance, volumes and financing sources, responsibility and dates of their
implementation. The National programs on energy saving in 1996-2000, 2001-
2005 both 2006-2010 and a number of target programs, for example, the National
program on transformation of boiler houses into mini-CHPs for 2007-2010 are
carried out successfully. Among the main programs that are being realized
nowadays are
the National program on energy saving for the period 2011-2015;
the National program of development of local and renewable energy
sources for the period 2011-2015,
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the Program of construction of the power plants working on biogas for
2010-2012,
the State program of construction of power plants on local types of fuel
in 2010-2015,
the State program of construction in 2011-2015 of hydroelectric power
stations in RB,
the Comprehensive program on design, construction and reconstruction
of energy effective houses in RB for the period 2009-2010 and till
2020, etc.
It is also necessary to note that the Program of development of the system of
technical rationing, standardization and compliance confirmation in the field of
energy saving for the period 2011 - 2015 within which the harmonization of the
Belarusian norms with European and international ones is planned to be provided.
It includes development of 136 state standards, 123 (88%) from which will be
developed on the basis of the European and international norms. It is planned to
ensure the development of new and re-examination of existing standards in the
field of construction aiming to increase the energy efficiency of the buildings and
of heat generating equipment. The standards concerning questions of introducing
the RES, local and alternative types of fuel, development of energy management
and energy audit of the organizations have been developed.
It is planned to develop the programs on construction of electric power
plants for heat and electric power generation with funding of the World Bank that
will allow decreasing of specific norms on generation of heat and electricity.
In Ukraine presently the main program document in the field of energy
efficiency and energy saving is the State target economic program of energy
efficiency and development of production of energy resources from RES and
alternative types of fuel for 2010-2015.
It is planned to develop and approve by the State Agency on Energy
Efficiency and Energy Saving the National plan of action in energy efficiency till
2020 within performance of commitments of Ukraine to the European Energy
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Community. The main objective of the Action Plan is raising the energy efficiency
by 20% until 2020 and increase a share of renewables to 11%. General purposes of
the Plan are reduction of energy consumption at the national level to 9% from the
average volume of final consumption, or 6,23 million tons of oil equivalent.
Besides, in the near future Ukraine is planning to develop and approve the
following programs in the field of energy efficiency and energy saving:
• the long-term strategic program on energy saving of Ukraine, providing,
first of all, replacements of natural gas with alternative types of fuel, increase
in production of own energy resources and reduction of power consumption
in housing and communal services;
• the state target program of modernization and development of housing and
communal services which is supposed to replace two existing programs and
three more programs which are in the process of development and
coordination;
• sectorial program on energy efficiency and energy saving of the State
committee of television and broadcasting;
• program of energy efficiency and energy saving of the Ministry of Defense;
• communication strategy of an agricultural and food industry complex of
Ukraine for the purpose of raising the awareness among the market players
about the best efficient practices;
• the program of modernization of systems of heat supply in the Lvov area for
the period 2012-2016;
• the regional target economic program of energy efficiency in the Lvov area
for 2012-2015.
In Russia the State Program of the Russian Federation "Energy Saving and
Increase of Power Efficiency for the period till 2020" (further – the Program) now
is realized.
Actions of the Program cover the principal branches of economy and the
social sphere of the Russian Federation.
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The program included the sectoral subprograms as well as subprogram to
encourage energy saving and efficiency in the members of Russian Federation and
provides with methodological, information and staffing support of actions of the
Program.
The Program includes the activities of two types: universal and widely
applicable in each sector, or in several sectors of the Russian economy, and
specific, applicable in concrete branches, taking into account their technological
features. The Program provides for removal from operation of old inefficient
capacities, the equipment, installations, and introduction instead of innovative
technologies and the new progressive equipment in the course of new construction
and modernization. Thus, the Program has a complex character.
Within two years (2011-2012) the realization of a State Program "Energy
Saving and Increase of Power Efficiency for the period till 2020" the energy
intensity of the Russian GDP decreased by more than 5,5%.
At the meeting of the Government of the Russian Federation 07.03.2013 the
draft of a State Program of the Russian Federation "Energy Efficiency and
Development of Electric Power Industry" with subprogram "Energy Saving and
Increase of Power Efficiency for the Period till 2020" was approved by the order of
the Government of the Russian Federation of 27.12.2010 by No. 2446. The State
Program "Energy Efficiency and Power Development" will be accepted after
adjustments till 01.09.2013 on the questions defined in the corresponding
assignment by results of meeting of the Government of the Russian Federation of
07.03.2013, including additional instruments of stimulation of energy efficiency
and energy saving.
Kazakhstan carries out the Comprehensive plan of increase of energy
efficiency over the period 2012-2015, the purpose of which is the decrease in
energy consumption of GDP of Kazakhstan no less than by 10% by 2015
comparing with 2008. The task of the plan is to develop a complex of the
legislative, organizational, scientific, technical, economic and financial measures
aimed at the reduction of irrational consumption of fuel and energy resources.
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Currently, there is being developed the Concept of development of electric
power branch of the Republic of Kazakhstan till 2030 which shape the basis for
Sectoral program of development of energy branch until 2030to be developed. The
program will include a part on energy efficiency.
Tajikistan realizes the following programs in the area of development of
renewable energy:
"The target comprehensive program on the large-scale use of RES, such as
energy of small rivers, solar, wind, biomass energy and energy of
underground sources";
“The program on effective use of hydro energy resources and on energy
saving for the period 2012-2020";
"The long-term program of construction of small power plants over the
period 2009-2020”.
It is important to note that the small-scale power generation is a key factor
which can reveal the potential of development of mountainous (93% of the
territory of the country) rural regions of Tajikistan, and has a high potential for
reduction of poverty and achievement of the development objectives. The purpose
of the Strategy of development of small hydro energy in Tajikistan is reliable and
steady electricity supply of the population in the isolated and remote areas of the
republic as well as of small and medium businesses.
Kyrgyzstan carries out the Energy saving program till 2015. Within the
program the implementation of energy saving activities and measures to increase
the energy efficiency will be carried out soon in the following directions:
preparation of drafts legal and normative documents for the
implementation of requirements of the Law "On Energy Saving" and
implementation of measures to increase the energy efficiency;
reconstruction of the existing power plants and energy-intensive
enterprises, modernization of the energy sector, thermo-isolation of
buildings, construction of buildings in which energy resources are
consumed more effectively;
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usage of local energy sources;
restructuring of the construction materials industry, start of production
of energy saving and thermo insulating materials;
development, production and installation of the equipment and
systems for metering and regulation of volume of expenses of hot
water, steam, natural gas, the electric power.
Moldova fulfills the National program on energy efficiency for 2011-2020,
the National plan of action on energy efficiency for 2013-2015 (purpose –to
increase efficiency of energy consumption and reduction of emissions of
greenhouse gases).
It is planned to develop the following documents:
programs of development of electric transport system and norms on energy
efficiency and environmental friendliness of energy devices used by final
users;
harmonization of technical standards with the standards of the European
Union and support of use of the advanced technologies providing high
efficiency;
plans of development of the centralized systems of a heat supply;
energy efficiency programs for the industrial sector;
the draft Law on energy efficiency of buildings and minimum requirements
to energy efficiency of buildings;
program of gradual increase in number of houses with almost zero
consumption of energy in public sector;
the Action Plan on biomass;
the rules of importing the tires with the labels C1, C2, C3 on which classes
of efficiency of use of fuel are specified;
own programs on energy efficiency for each three years and the plans of
action for every year with definition of priority measures, financing sources,
etc., developed by regional and municipal administrative bodies;
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The regulation base necessary for the promotion and stimulation of energy
efficiency and the use of renewable;
the national plan of action on energy efficiency for each 3 years;
indicators and reference points on energy efficiency coordinated with
established ones in the European Union.
Moldova implements an integrated and systemic approach to a problem of
energy efficiency increase.
In Uzbekistan the programs of energy sector development and of the
industrial development are designed taking into account the need for improving the
energy efficiency of national economy.
In particular, for the implementation of the Law of the Republic of
Uzbekistan "On Rational Use of Energy" there has been developed and is in the
process of realization the “Energy Saving Program of Uzbekenergo for the period
till 2020”, providing the system of measures for realization of energy saving
potential of the branch which is estimated about 3-5 million tons of fuel
equivalent".
The program is balanced with expected indicators of production and
consumption of electricity for this period and is aimed at the realization of energy
saving potential in the branches at the expense of system`s performance of
measures for efficient use of fuel, reduction of losses of electricity in all chains of
its production, transfer and distribution. Achievement of this purpose is provided at
the expense of performance of measures for increase of energy performance of the
existing equipment with high degree of wear through its modernization, high-
quality repair and preventive actions, reconstruction of the part of power plants and
energy supply grids with the implementation and use of the equipment;
installations and the technologies satisfying the requirements of the current level of
development of energy generation, transfer and distribution; improvement of
energy resources metering systems and devices, and also on management of energy
consumption.
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Chapter II. Potential and feasibility for energy saving and energy
efficiency in CIS countries.
Currently CIS countries have considerable energy saving potential.
According to experts and national energy efficiency programs data untapped
energy efficiency potential of CIS countries is roughly estimated at 450 million
TOE (tons of oil equivalent), including:
Azerbaijan 10 million TOE
Armenia 1 million TOE
Belarus 5 million TOE
Kazakhstan 30 million TOE
Kyrgyzstan 1 million TOE
Moldova 1 million TOE
Russia 300 million TOE
Tajikistan 1 million TOE
Turkmenistan 15 million TOE
Uzbekistan 25 million TOE
Ukraine 70 million TOE
It is important to note that so far all states except Belarus and Ukraine have not
unlocked the potential of low-cost energy efficiency measures. In Belarus the
potential of low-cost measures is almost exhausted at this point.
According to experts the highest technological potential of increasing energy
efficiency is showed in such sectors as housing (apartment buildings), power
generation and industry.
2.1 Energy supply saving potential
Energy sector in all CIS countries was formed in the former Soviet Union on
a common technological base and it has number of common features and problems.
Deterioration of a large part of the generating facilities and power grids as
well as persistent underinvestment in the industry is the common problem for CIS
countries. To maintain energy system reliability, large-scale modernization
program of generating capacities and grids is required.
In Ukraine for example about 80% of the thermal power plants units require
modernization or replacement. About 35% of overhead power transmission lines
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(220-330 kV) operate for more than 40 years, 55% of transformer substations
prime equipment has exhausted its estimated service life. In the energy
distribution sector a significant part of power facilities have worked out their
resources: 31% of power grids and 32% of transformation substations are subject
for reconstruction and replacement. Equipment deterioration leads to excessive
fuel consumption, reduction of working capacitance and growing negative
environmental impact.
In Kazakhstan real losses are unknown as proper district heating supply
metering is not provided. About 60% of total heating mains length is more than 25
years old. The average age of heating mains as of 2002 is 18 years. The actual
heat loss in the transmission system in the cities according to experts’ estimates is
two and more times more than that of the standard.
Unfortunately in other CIS countries the situation is quite similar. Therefore,
it is possible to assert with confidence, that the power plants fuel consumption can
be reduced by about a third. However it is a conservative estimate because it does
not take into account energy savings that can be achieved in consequence of
increased use of CHP, production decentralization and optimization of power
distribution system.
Significant energy savings potential is concentrated in energy transmission
sector. Potential for transmission losses reduction is about one third of actual
losses. In the municipal heating network losses reach 20-25% of a total heat
production.
The main causes of losses:
• poor condition of heating systems;
• lack of metering and control systems of thermal energy;
• inefficient use of heat exchangers;
• inflated installed capacity of heat sources, etc.
As a result of introduction of energy saving measures in Belarus, the country
managed to reduce heat losses from 26% in 2001 to 17% in 2012.
Reduction of losses is achieved through:
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• replacement of heating systems using pre-insulated pipes;
• installation of high-efficiency heat transfer equipment;
• analysis and evaluation of heat loss;
• measures to optimize the heating schemes with the installation of lower
capacity heat sources;
• transfer of boilers in the mini-CHP plants using natural gas, local and
renewable energy sources.
2.2 Energy consumption saving potential
The potential of energy efficiency increase in end-use sectors is significantly
higher than in energy generation. In particular, financial potential in end-use
sectors is estimated 4 times higher than in electricity production and heating
together. Furthermore, energy saving for end-users is accompanied by further
reduction in primary energy consumption, in total energy production and
transmission system. So reducing energy consumption by 1 kWh, end-user saves
about 5 kWh of primary energy resources.
2.2.1. Industry
Up to 70% of energy saving potential in industrial sector is concentrated in
several most energy-intensive industries:
1) industries with the highest absolute rates of fuel and energy resources
consumption: iron and steel industry (cast iron and steel production, non-
ferrous metals), chemical and petrochemical industries;
2) industries with high cost proportion of fuel and energy in production costs:
construction materials (especially cement, brick, glass), pulp and paper
industry (production of pulp, paper and cardboard), textiles (weaving) and
mechanical engineering etc.
For example in Russia, three most energy-intensive industries (iron and
steel, pulp and paper and cement industries) possess 53% of the energy saving
potential; energy saving potential of steel industry accounts for 39%.
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Despite the importance of the industrial sector in terms of achieving
performance targets in the sphere of energy savings and energy efficiency of the
economy in general, the industry is a sector of the economy where energy
efficiency state policies are extremely limited. In fact, they are related to
mandatory energy audit, establishment of energy efficiency monitoring and
introduction of government support measures.
It is important to note that the outdated technological base of the industrial
sector is a common problem to all CIS countries.
Realization of structural changes in a production sector is an extremely
complicate part of national policy, as this particular sector of economy is described
in terms of higher (about 70%) amortization.
At the industrial complex enterprises energy saving measures are advisable
to plan as a part of complex measures aimed at re-equipment and modernization of
producing units. A good example of this approach is a set of activities
implemented on the largest petrochemical plant in Belarus called «Polimir» JS
«Naftan» (optimization schemes of internal and external power supply,
construction of 7.6 MW cogeneration plant etc.).
At the enterprises a good account was given for installing trigeneration
plants (combined cooling, heating and power plants; JS «Grodnokhimvolokno»).
This is especially important at the factories with large consumption of an
appropriate energy (greenhouse plants, glass plants, etc.).
In general, investments into energy efficiency enhancements in industry are
economically and financial viable: in Russia 97% of technical potential could be
realized through cost effective investments, 80% of the technical potential could be
realized through a financially attractive investments.
Due to the implementation of energy saving policy in Ukraine during 2007-
2010, energy efficiency of the mining industry has increased by 10% in four years
– from 25.8% to 35.4% of the EU level. The mining and smelting complex is the
largest consumer of raw materials, equipment and energy resources and
consequently the largest producer in industrial sector. Energy consumption in
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mining and metallurgical complex accounts for 65% of total energy consumption
in industrial sector.
2.2.2. Agriculture
The main types of energy consumed by agricultural sector, are petroleum
products (fuels and lubricants), heat, electricity, gas. Priority to different types of
energy is given depending on the agricultural subsectors. So animal farming
consumes mostly petroleum products and electricity, crop farming consumes
mostly petroleum products, and greenhouse needs heat and electricity.
In order to improve the competitiveness of the products, agricultural sector
faces the necessity of modernization, a key objective of which is to increase
productivity and reduce energy consumption. The main direction of energy saving
is to consume it efficiently by matching capacity of equipment with specific needs,
schedule compliance of electrical equipment, which prevents idle running and part
- load operation, maintenance of electrical equipment in good technical condition,
which means elimination of deviations from the standard state.
Reduction of electricity consumption for lighting is achieved by replacement
of incandescent lamps, which convert to light only 5-8 % of consumed energy,
with fluorescent lamps, net output of which is 20-30%.
It is estimated that about half of energy savings can be achieved by
installation of energy saving machinery, technological processes and equipment,
including industrial- mastered and new, that are subject to development , and about
a tenth - by raising the level of utilization of secondary energy resources.
Large livestock complexes, that remained part of agriculture sector of
Belarus, allow for introduction of biogas complexes for production of heat and
electricity. For this purpose a special program for construction of such complexes
until 2015 has been worked out. Important areas for agriculture is the replacement
of imported energy sources with local energy sources, introduction of heat
recovery systems, optimization of heating schemes, use of energy-efficient
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technologies in vegetable and greenhouse plants. According to estimates
consumption of FERs may be reduced by 30%.
A common problem of agricultural development in the CIS countries is low
value added. Improvement of energy efficiency of agricultural sector of Ukraine to
the EU level would save 1,390 kt.o.e. or 66.7 % of final energy consumption in
2008, which is about 600 million euros in 2010 prices. However, this amounts to
about a one third of the value added of the sector. This example illustrates well the
importance of energy efficiency in agriculture.
The potential of energy saving and increased energy efficiency in agriculture
can be achieved by:
• introduction of contour farming and drainage system (decommissioning of
low productive eroded land and creation of pastures, hayfields, etc.);
• replacement of the spring plowing surface with soil treatment;
• introduction of energy saving technologies for growing crops;
• process optimization for drying of grain;
• introduction of modern less energy-intensive technologies for production
of compound feed;
• energy-efficient modern agricultural machinery;
• modern equipment in the power supply system to reduce energy
consumption and automated process control;
• increase volume of crops that can be used to produce bio-diesel and biogas;
• improvement of the system of collection of agricultural wastes, to be used
for production of biogas;
• production and increased use of biofuels.
2.2.3 . Transport sector
Energy consumption in transport sector in 2000-2010 provided the main
growth of primary energy consumption in Russia. In 2000-2008, it grew by 45.6
million t.f.e., including the railway transport 1.3 million t.f.e., pipeline transport –
10.7 million t.f.e., automobile transport – 27.3 million t.f.e. and other types of
55
transport – 6.3 t.f.e. That is, the share of automobile transport accounted for 60%
of the increase. In 2000-2010, this share was 66%, or up to two-thirds, because
road transport was less vulnerable to crisis reduction of turnover in 2009-2010. The
increase in fuel consumption of private vehicles was 18.8 million t.f.e. in 2000-
2010, or 50% of the total increase in energy consumption in transport. This
increase in energy consumption is significantly bigger than that of power plants or
residential and public buildings combined. In general, a similar pattern is common
for all countries of the CIS.
As for the energy saving potential transport sector usually follows such
sectors as housing, industry, production of heat and electricity.
As transport sector is closely linked with almost all industrial and social
spheres, its development trends are highly correlated with general economic trends.
With all variety of conditions and specifics of the various sub-sectors of transport
sector, FERs are used quite inefficiently.
The following measures are seen to be rational to improve the efficiency of
energy resources use in transport sector. In rail transport it is necessary: to expand
electrification and to transfer to electric individual sections of the railway; upgrade
the road system by building non-abutting railway; gradually introduce modern
rolling stock, including locomotives; optimize freight train formation plan and the
direction of traffic volumes; to reconstruct boiler and heat engineering services;
introduce automated commercial electricity metering; put in place an automated
system for the outdoor lighting.
In road transport, it is necessary: to improve the structure of the vehicle by
means of technical regulation and the introduction of differentiated stimulating
economic mechanisms, expand the use of alternative fuels, including compressed
natural gas and biofuels, and fuel additives; introduce energy saving technology
maintenance and repair of vehicles.
In the area of the main highways energy saving measures should be directed
to: optimize the development of road infrastructure with priority for public roads,
expanding the use of new technologies and materials in the construction, repair and
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maintenance of roads, reduction of energy consumption in industrial processes for
the production of crushed stone, asphalt and ferroconcrete.
On sea and river fleet it is necessary to: expand the use of best practice speed
vessels; improve utilization of thermal energy for heating and electricity supply
vessels; use alternative sources of energy supply of passenger tourist boats while
parked at the expense of their connection to the shore electrical grid; create a series
of automated monitoring systems and energy management in ports.
With due attention to the issues of energy efficiency in the transport sector, it
is possible to achieve significant results. For example, through the introduction of
energy saving and energy-efficient technologies at the Ministry of Transport and
Communications of the Republic of Belarus in 2006-2010 the amount of total
consumption of fuel and energy resources in the sector fell by 6% ; the generalized
energy costs - by 11%, energy intensity of production output, works performed and
services rendered - by 47 %.
2.2.4. Housing and communal services
The CIS countries have huge potential for energy saving in housing sector
(about one third of the total energy saving potential, or 70% of total energy
consumption in this sector).
Generally about 10% of the housing stock is in need of urgent repair in the
CIS countries. From year to year, the share of dilapidated and emergency housing
with wear and tear for more than 60% increased and became a subject to the
demolition. Housing made of precast ferroconcrete is the most energy-intensive in
the world but forms a significant part of the housing stock in the cities.
The actual heat loss from buildings is much higher than standard because of
poor quality of construction and operation. The share of physical deterioration of
supply networks is very high: more than 50% in water supply networks, more than
50% in heat supply facilities, more than 65% in electric power grids and more than
60% in general engineering services).
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The main directions of energy savings in the residential sector are:
• optimization of district heating schemes, modernization of power plants and
decommissioning of inefficient boilers;
• use energy-efficient constructive and engineering systems;
• organization of good governance in servicing residential buildings;
• implementation of residential energy-efficient buildings projects with
controlled ventilation, a single inlet of heat carrier into a separate apartment
for the organization of heat metering and heat control in every apartment,
with utilization of ventilation emissions;
• design and construction of buildings with energy-efficient technologies;
• thermal rehabilitation of buildings and thermo modernization of houses ;
• implementation of energy efficient lighting systems;
• creation of a complex technological equipment and the development of
solutions for using heat pumps in heating systems;
• creation of the combined technologies of low-temperature heat from the
quantitative and qualitative-quantitative regulation of the heat load, the
decentralization of heat generating capacities;
• involvement of the population into the process of energy conservation and
improving efficiency of use of FER in buildings.
The largest part of the potential energy savings can be achieved as a result of
measures to improve energy efficiency in heating and hot water supply.
The complexity of the reforms that encourage energy saving, which
stimulate introduction of energy efficient technologies and equipment, installation
of heat meters, the use of two-level tariffs (for both electricity and natural gas) and
encourage the population to economical consumption of thermal energy.
The complexity of reforms that encourage energy saving starting from the
implementation of energy efficient technologies and equipment, installation of heat
meters, using two-level tariffs (for both electricity and natural gas) and ending with
the encouragement of the population to rational consumption of heat is the key to
improving energy efficiency in the sector.
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2.3. The most effective approaches, tools and incentives for energy efficiency
in the CIS countries
2.3.1. Legislation and regulation
It should be noted the positive experience of the formation of legislative and
regulatory base in the Republic of Belarus.
Energy conservation and energy efficiency are stated as the key areas in the
state energy policy. Primary and secondary legislation, institutional structure,
mechanisms of the governmental support are created and constantly improved.
The system of legal regulations which includes regulations, standards, and
specifications has been constantly developed. Methodological instructions for its
use have been also created.
Nevertheless, development of legislation in terms of introduction of market
mechanisms and improving the tariffs, creating conditions for cooperation between
government and business remains relevant.
Ukraine and the Russian Federation develop to a large extent similar system.
Establishing of special government body which is responsible for
development and implementation of energy efficiency policies is also very
important. Such government body gets a special importance in the countries
exporting energy resources.
Authorizing Ministries of Energy to implement energy saving policy creates
an internal conflict of interests linked with the implementation of mutually
exclusive functions of the Ministry – on the one hand, to ensure increased
production and sales of energy resources, heat and electricity, and on the another
hand, to solve the opposite task - to reduce the energy consumption. It has a
negative impact on the formation and implementation of energy efficiency policy
and leads to the fact that energy efficiency improvement becomes a secondary task.
The above mentioned body should be authorized to carry out the following
functions:
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• regulation of the activities of businesses and individuals for the effective use
of FER and energy saving;
• organization of the development and implementation of concepts and
national energy saving programs;
• development of criteria for evaluating the effectiveness of energy resources
use on regional and sectoral levels;
• creation of economic conditions to stimulate the interest of legal entities and
individuals in energy savings;
• participation in the development of national, sectoral and local energy
balances;
• formation of state order for scientific researches and development works in
energy saving area.
2.3.2. Management of energy saving and energy efficiency programs
Energy saving and energy efficiency programs should be formed on the
basis of a system of long-, medium-and short-term objectives and should contain:
• clear priorities,
• a comprehensive system of indicators to evaluate achievements of the
declared objectives,
• built-in system of regular monitoring of results and adjusting tasks.
It is important that programs contain a specific list of activities which are
supported by an adequate amount of financial resources.
Formation of multi-level system, where national programs are supported by
relevant regional and sectoral energy saving programs allows achieving good
results.
Governments may be advised to conduct an audit of short-term objectives
and parameters of actions (priority, time, funding, etc.) by taking into account
changes in the external and internal circumstances.
It is reasonable to carry out regular analysis of the barriers to implement
state energy efficiency policy and promptly develop and introduce measures to
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overcome them; to analyze effectiveness of individual incentives and mechanisms;
to continue working on improving the regulations, and study international energy
efficiency and RES experience.
2.3.3. Regulation of energy prices and tariffs
Almost all CIS countries are striving to achieve the elimination of cross-
subsidies in the energy sector, which is a big problem and causes a significant
distortions on the market. Energy subsidies remain a traditional measure of
performing a social policy. As a result, low energy prices do not provide sufficient
motivation for energy saving consumption and investments into energy-efficient
equipment.
Taking into account the necessity to ensure socially acceptable level of
payment for the consumed energy it might be recommended a gradual optimization
of tariffs for energy, including:
implementing a system of differentiated electricity tariffs for consumers
based on times of the day,
creation of economic incentives for using of energy-saving technologies in
production processes and energy savings by consumers;
formation and establishment of electricity tariff rates based on type of
activity (generation, transmission, distribution, sales);
gradual elimination of cross-subsidies of energy tariffs, including those for
population.
The practice of granting preferential tariffs and cross-subsidizing large
energy-intensive industries leads to the further use of non-competitive production
technologies. Lack of motivation for rational use of energy and investment in
energy efficiency increases social costs.
One of the main incentives for improving the energy efficiency of natural
monopolies and municipal organizations is the use of long-term tariff regulation
methods, including the method of profit return on invested capital with
simultaneous consolidating of a companies’ commitment to quality, reliability, and
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development of provided services. Based on this regulation, companies have an
incentive to cut costs that include costs of energy resources and to improve the
efficiency of resources’ use since savings from these actions retain to companies
and can be used for any companies’ purposes.
2.3.4. Stimulating processes of energy consumption and energy saving
It is advisable to consider the following practices:
experience of two-levels energy tariffs system, when higher tariffs for
energy are set for legal entities and individuals for energy consumption
above the established standards;
introduction of preferential taxation for enterprises that have
implemented energy saving programs and have achieved results above the
established limit;
introduction of a bonus system for managers of government
enterprises and public sector organizations for achievement of significant
energy saving results.
Incentives for owners of individual houses and apartments, implemented
energy efficiency measures at their own expenses, play an important role in
engaging population to increase energy efficiency activities. The first experience of
work with individuals was obtained during campaign for ensuring all households
with meters of hot and cold water.
2.3.5. Financing energy saving and energy efficiency measures
Lack of financial resources for the implementation of energy efficiency
activities is a significant factor that prevents improving energy efficiency and
energy saving.
In the initial stage, an important role in promoting energy efficiency plays
budget subsidies provided for the implementation of priority activities on a
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competitive basis. They can cover either 100% of implementing energy-saving
activities’ costs or some part of them. In particular, the structure of funding sources
in the Republic of Belarus has been changing. In 1996-2005 almost half of the
investment was carried out by government funds and 40% by the companies' own
funds. The investment structure of 2006-2010 was different - own funds of
enterprisers became the main source and about one-third was financed by the
Government, ratio of loaned funds had increased to 10% of the total funding. The
volume of investments into energy efficiency has constantly grown. US$ 1,172.3
million was invested into energy savings activities in 2010, which is 24.6 times
more than in 1996. In 2010, loans and borrowings formed almost a third of the
total financing with 25% of government sources participation. It is envisaged the
increase of volumes of credits, loans and other funds up to 20% in the structure of
energy efficiency funding for 2011-2015.
Financing of government programs for the periods of 2006-2010 and 2011-
2020 years should be implemented with the use of government and private support
and public-private partnerships, including the means of foreign borrowing by
international financial organizations and national banks’ structures.
It might be recommended to create the special mechanisms for financing
energy-saving activities, such as a revolving fund, budgetary allocations on terms
of repayment and maturity, mechanism of providing government guarantees and
repayment parts of loans interest rate to commercial banks for the loans used for
implementation of energy-saving projects.
It is important to promote developing of energy services market to encourage
establishment and operation of ESCOs and other market-based mechanisms for
energy efficiency investments.
It is important to ensure a stable macroeconomic environment and clear rules
on investment’s return for implementation of energy efficiency and energy saving
activities for all sectors of the economy as on the basis of long-term tariff
regulation and participation of government if needed, which allow to establish
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clear criteria for private investments and to eliminate investments’ risks in energy
efficiency projects.
2.3.6. Raising public awareness and training of staff for implementation of
programs of energy saving and energy efficiency activities
It should be noted a low level of information about scientific, technical,
organizational, economic and other energy saving and RES opportunities in
information and education area.
However, targeted and systematic work to promote economic,
environmental and social benefits of energy efficiency gives practical results.
Information support of energy saving activities should include:
• conducting energy efficiency workshops, seminars at the sectoral, regional,
national and international levels, as well as international exhibitions of
energy-efficient technologies, equipment, instruments, materials, and
scientific and technical conferences, forums and symposiums;
• organization of large-scale actions, such as "Energy efficiency - in action",
"Minus 60 watts in each apartment," "Time to change habits" with wide use
of media resources aimed to shape public opinion regarding energy saving
both in national economy and in everyday life;
• publication of specialized magazines;
• formation of relevant web-resources;
• organization of advertising campaigns on television, etc.
At the same time it should be organized the systematic work on training and
improving qualifications of managers and professionals including the following:
creating an educational system in the area of energy saving;
organizing training on energy management in the leading universities
of the country;
implementing the course "Fundamentals of energy saving" in all
higher and secondary specialized educational institutions and as optional - in
secondary schools;
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introduction of the courses on energy efficiency into the training and
retraining programs.
It is also important to pay attention to the training of pupils in schools.
Belarusian experience of conducting competitions of children's drawings is
interesting. To stimulate participants, winning drawings were published in the form
of leaflets and distributed as social advertising in public transport, public places,
educational institutions, etc.
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Chapter III. International cooperation of CIS members in the area of
energy efficiency and energy saving
3.1. Analysis of the current status of international cooperation of CIS members
in the field of energy efficiency and energy saving
All CIS members have been developing international cooperation in the area
of energy saving, energy efficiency improvement and use of renewable energy for
a long time.
CIS members foster cooperation in the framework of the Community of
Independent States in order to maintain and develop traditional ties. By the present
moment the following major documents have been adopted and the following
decisions have been made:
• Agreement on cooperation between the CIS members in the field of energy
efficiency and energy saving, adopted by the CIS Executive Committee in
Kishinev on October 7, 2002;
• Main directions and principles of interaction between the CIS members in
the field of energy efficiency and energy saving, approved by the decision of the
CIS Economic Council on March 11, 2005;
• Strategy of interaction and cooperation between the CIS members in the
field of electric power for the period up to 2020, approved by the decision of the
CIS Electric Power Council on May 26, 2005;
• Agreements on cooperation between the CIS members in the field of energy
efficiency and energy saving.
The Strategy (Main directions) of interaction and cooperation between the
CIS members in the field of electric power for the period up to 2020 as well as the
Main directions and principles of interaction between the CIS members in the field
of energy efficiency and energy saving, worked out by the Energy Policy Center of
the Russian Federation in cooperation with the CIS Executive Committee and with
the financial support of the UNECE Committee on sustainable energy will serve as
a basis for the CIS members’ activities in the field of electrical energy.
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These documents contain detailed information on the objectives and possible
directions of cooperation between the CIS countries in the field of energy
efficiency and energy saving.
In order to give further impetus to the economic cooperation between the
CIS countries, to ensure sustainable development and economic security, to ensure
welfare and to improve quality of life of the population basing on the synergetic
effect and economy of scale, to enhance competitiveness of national economies of
the CIS countries and to strengthen their positions in the global economic system
in 2008 the CIS Council of Heads of Governments made the decision to approve
the Strategy of economic development of the Community of Independent States for
the period up to 2020.
The Strategy provides, in particular, that the CIS members will interact in
the field of fuel and energy complex in the following directions:
• development and strengthening of technological basis of electric power
sector based on parallel functioning of energy systems of the CIS member
countries;
• forming of the common CIS electricity market;
• development of transnational transport energy networks;
• development of small hydropower with due regard to international
experience;
• coordination of actions of exporters, transit countries and importers of fuel
and energy resources;
• advancing technological capabilities of the use of unconventional and
renewable energy sources, creating conditions for production of respective
equipment at the CIS countries’ factories;
• development of industrial base of fuel and energy complex, creation of new
energy capacities.
The Strategy also sets a task to identify new approaches to interaction in the
area of improvement of fuel and energy resources use efficiency with due regard to
international experience. National energy programs of the CIS member states were
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supposed to be updated in the meaning of increased focus on energy efficiency
policy and energy saving, use of alternative types of fuel and tackling
environmental problems.
The CIS member states took the decision to carry out additional measures in
the field of energy efficiency and energy supply, development of standardization,
certification and metrology systems, working out of international standards that
determine and set requirements for equipment and household appliances, pursuing
of a corresponding pricing policy, creation of a unified information base on high
efficient energy equipment, use of renewable energy sources. Besides, all CIS
countries emphasized the urgency of dedicating of a separate document to energy
cooperation issues; for these purposes the respective concept of cooperation in this
area was supposed to be worked out.
Members of the CIS Electric Power Council hold the activities on ensuring
of sustainable energy supply of the CIS member states through the use of the
advantages of the unified electric power technological base and ensuring of a
stable parallel functioning of national electric power systems:
• pursuing a coordinated policy in the electric power area in order to ensure
sustainable and stable energy supply of economy and population basing on the
efficient functioning of CIS countries’ energy systems;
• elaboration of CIS countries’ electric power systems functioning and
development strategy as a part of fuel and energy complex and coordination of CIS
countries’ energy systems prospective development programs;
• identifying of common principles and norms of joint functioning of CIS
member states’ energy systems;
• coordination of technological aspects of joint functioning of CIS member
states’ energy systems;
• shaping of an interstate market of electric power and capacity, equipment,
funding and innovations;
• shaping of a CIS member states’ integrated information space in the area of
electrical energy with regard to international standards;
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• elaboration and implementation of joint environmental programs in the field
of electrical energy;
• cooperation with international organizations dealing with electric power
sector issues, production, transmission and distribution firms and companies,
energy and power engineering equipment suppliers, investors.
Alongside with that national reports note that many decisions taken in the
framework of the CIS are not implemented in the proper way and are of a
declarative character that provides for a coherent harmonization of the legal and
regulatory framework and forming of a unified system of technical norms and
regulations. Practical steps of such cooperation are, in general, of an informational
character and consist in holding workshops, conferences and other kinds of
information interaction.
The prospects of implementation of experimental and demonstration projects
with account for drastic differences between the CIS countries in terms of fuel and
energy balances structure, economic conditions as well as in terms of technical
norms and regulations, in opinion of national experts, are quite uncertain.
Such a situation has a negative influence on both striving of the CIS
members to strengthen integration processes and mid- and long-term prospects of
development of economic relations between the CIS countries in the energy field.
Cooperation and initiatives within the Eurasian Economic Community (EEC) and
Eurasian Economic Commission is an important step towards shaping joint
positions and areas of activities for Russia, Belarus and Kazakhstan. So, in
accordance with the decision of the Interstate Council of the Eurasian Economic
Commission No. 401 of December 12, 2008, forming of the EEC joint energy
market information support system is to be continued.
International financial support of energy efficiency and energy saving policy
in the CIS member states is provided by the UN, its bodies and programs (UNDP,
UN Regional Commissions – UNECE, UN ESCAP and others), by the Global
Environment Facility, the World Bank Group, the European Union, US Agency for
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International Development (USAID) and other donors. Bilateral cooperation in the
area of energy efficiency with non-CIS countries is in progress as well.
Main directions of cooperation:
• working out of a legal and regulatory framework;
• estimation of energy saving potential in different sectors;
• strengthening of human capacity;
• development of energy service market;
• estimation of renewable energy use potential and recommendations;
• awareness rising in the field of energy efficiency;
• implementing of new technologies and best practices;
• implementation of demonstrational projects.
Numerous projects, including pilot projects on building and modernization
of energy efficient objects in industry and housing and utility sector, projects on
elaboration of technical norms and regulations to stimulate investments into
projects on energy efficiency in electric power sector, heat supply system, public
service, construction and industry have been implemented and are being
implemented with the support of international organizations and grants in the CIS
countries.
As Ukraine and Moldova are contracting parties to the Energy Community
Treaty, the European Union provides considerable assistance to these countries in
order to bring national legislation systems into conformity with the EU one.
CIS countries also develop cooperation with International Renewable
Energy Agency (IRENA), International Partnership for Energy Efficiency
Cooperation (IPEEC) and Global Partnership for Energy Efficiency in Buildings
(GREEB).
Generally, it is important to emphasize a considerable positive role of
regional and country technological assistance projects implementation in the CIS
countries. International support to the CIS countries contributed to creation of
energy efficiency improvement centers, implementation of pilot projects and
creation of demonstrational areas, preparation of recommendations on the use of
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international experience with due consideration of national specific features. In the
framework of such projects the countries get necessary consultative,
methodological, organizational and other kinds of assistance in implementation of
national policies in the field of energy efficiency improvement and use of
renewable energy sources.
Herewith international cooperation is most profitable for those states which
managed to shape comprehensive national energy efficiency strategies and create
necessary conditions for their implementation. In this case international assistance
acts only as a supplementary factor to the efforts made at the national level and is
incorporated into national strategies. In the countries, where national energy saving
policies are not fully shaped (for instance, Turkmenistan and Azerbaijan),
international assistance helps to attract attention of societies and governments to
prospects and opportunities of energy saving.
3.2. Analysis of national energy saving and energy efficiency programs in the
context of opportunities of deepening cooperation between the CIS countries
CIS countries’ national energy saving and energy efficiency programs
enable these countries to develop international cooperation within the
Commonwealth almost without any restrictions.
Differences in approaches to energy saving does not impede international
cooperation development. Instead, taking into account common features of
technological frameworks of these countries, the results achieved and lessons
learned in follow-up of such cooperation would be of great interest for all
countries.
Orientation on the EU energy saving legislation and standards does not
create any obstacles for cooperation within the CIS as well; it is an attempt to
adjust best international experience to the CIS countries’ conditions.
It is necessary to mention that despite the differences in structure of fuel and
energy balances, in economic situation and state energy efficiency policies the
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countries come across similar difficulties in implementation of national energy
efficiency programs.
At present unsolved issue of financing is one of the main obstacles on the
way of energy saving policy implementation in almost all the CIS countries. At the
same time the countries have so far accumulated a certain experience of attracting
investments into energy saving projects. The forms of these investments are as
follows:
• direct financing from the state and/or local budgets;
• financing including attraction of financial resources from state and regional
budgets;
• extra-budgetary energy saving funds;
• private investments of companies and organizations;
• financing including attraction of financial resources of energy saving
associations, companies, groups of companies, financial-industrial groups etc.;
financial resources of private individuals; foreign loans and investments;
• leasing of energy saving equipment supposing that afforded finances will be
paid back at the cost of the income got in the course of the project implementation;
• performance contract supposing that the cost of afforded energy saving
equipment and services will be paid back at the expense of the cost of energy that
will be produced and saved after a project is started up.
Key challenges to efficient energy use still are:
• low rate of modernization of economy in general and production capacities
in particular;
• biased energy resources pricing system as a result of administrative
influence and cross-subsidization;
• lack of competition on the market, predominance of vertically integrated
monopolies, inefficient management of state factories;
• lack of a stable legal and regulatory framework;
• difficulties of implementation of economic mechanism of energy saving
stimulation in public sector;
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• lack of measures stimulating efficient use of energy;
• high investment risks.
Generally, in the financial and economic sphere there are such sharp
problems as price instability and imperfect system of price formation for energy
resources which does not allow accumulating investments at factories, high
banking and interest rates and difficult procedure of getting mid- and long-term
loans for technological renovation and buying of high-efficiency equipment.
The problem of insufficient financing of research and development,
modernization and promotion of energy machine and instrument engineering is
sharp as well.
The Commonwealth of Independent States has in its disposal all
opportunities both in terms of resources’ reserves and in terms of productive
capacity of fuel and energy complexes, to reach the necessary level of energy
security for its members altogether and for every member in particular on
conditions of development of mutually beneficial economic, scientific and
technological cooperation and use of developed countries’ experience in the field
of energy and energy saving.
Proven reserves of organic fuel, hydro energy potential, fissionable
(radioactive) materials deposits, unconventional and renewable energy sources
potential as well as energy infrastructure of the CIS countries create necessary
conditions for ensuring sustainable fuel and energy supply of economies and
population and retaining a position of a region which is one of the main world
market energy suppliers in the foreseeable future.
For CIS member states with high level of energy intensity of economy and,
as a result, with high energy saving potential it is very important to base their
economic policies on planned in advance economic growth rates that would get
ahead of primary energy demand growth rates.
Pursuing of an assertive state energy saving policy is one of the main aspects
of energy security ensuring for all the CIS countries, in the first line for those
which satisfy a certain part of their energy needs by means of imports of energy
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carriers. For energy exporting countries lower energy intensity of economy might
contribute to higher level of both energy and national security.
Energy efficiency issues have not reached necessary positions at the
economic level; they have not become a basis of a new life pattern and attitude to
energy resources among population.
Decisions adopted within the CIS and CIS Electric Power Council
demonstrate readiness to develop cooperation in the area of energy efficiency
improvement, but political will which is not underpinned by sufficient financial
resources turns into a diffuse declaration of intent.
3.3. Implications of cooperation between the CIS member states
All CIS countries make it their mission to modernize their economies and, in
particular, energy sectors that would require considerable long-term investments to
ensure their modernization, sustainable development, safety, self-sufficiency and
competitiveness.
Electric power infrastructure is deteriorating and getting outdated;
technological lifespan of numerous power plants has been considerably exceeded,
as a result, they operate with a low level of efficiency.
Special importance is being attached to shaping a unified CIS electric power
market on the basis of parallel operating CIS electric power systems in order to:
• enhance safety of electricity supply and consumer experience in the CIS
counties;
• enhance efficiency of the CIS Unified Electricity Market (CIS UEM)
functioning;
• optimize use of fuel and energy resources, hydro energy resources and other
renewable energy sources in electric power sector and improve environmental
conditions in the CIS UEM countries;
• pull together electric power branch reforming processes in the CIS countries;
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• create economic, legal and technological basis for further integration of
electricity markets of CIS states and other European and Asian countries.
Parallel functioning of electric power systems ensures satisfaction of
electricity and capacity demand in each country at any time in a 24-hour period at
the cost of their own power plants and electricity supplies from electric power
systems of other countries on a contractual basis. Under these circumstances, as
total amount of energy producers and consumers grows, the process of
maintenance of standard frequency within the stipulated limits and ensuring of
interstate electricity flows gets simplified. Parallel functioning of energy systems
contributes to enhanced safety of energy supply and lower total power capacity
reserves that ensures continuous electric power supply.
To ensure CIS UEM successful functioning it is necessary to harmonize
national legislation, legal and economic conditions of economic entities’
functioning, establish a system of state support of priority directions of
international cooperation for the purposes of CIS UEM development; solve
nonpayment issue and the issue of balancing of trade and financial relations
between the CIS member states.
Development of cooperation within the CIS makes it possible to lower total
energy costs, enhance CIS economies’ competitiveness and stability of energy
supply.
Moreover, besides modernization of generating capacities and networks,
there is a need to increase new capacities launching rates with joint increase in
efficiency of their use.
In fact, development of cooperation within the CIS in the field of energy
efficiency implies concentration of resources in the priority area of development
and makes it possible to get a synergetic effect from invested resources through
replication of results and economy of scale.
Moreover, most CIS countries do not dispose financial opportunities to
implement big projects. Big projects and programs implementation is possible
within the CIS. Besides, it is possible to implement within the CIS a complex
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approach to energy efficiency improvement, on the one hand, and quickest possible
development of national industrial, scientific and technological base of CIS
member states – on the other one.
In the meantime, the present CIS countries’ energy systems status-quo
proves the necessity to advance principles of cooperation with regard to ensuring
of a balanced approach to electricity exports and imports within the
Commonwealth, to harmonize legal and regulatory framework of electricity transit,
to form a common CIS electricity market that would regulate cross-border and
regional electricity trade, to solve a problem of unplanned electricity flows
between the CIS countries’ energy systems, to coordinate activities on construction
of energy and network objects, network topology change.
Principles of CIS countries’ interaction in emergency cases at fuel and
energy complex facilities are being elaborated at several levels of both bilateral
and multilateral relations in electric power and oil and gas branches. This will
make it possible to improve coordination of activities of national ministries,
sectoral interstate cooperation bodies, as well as to unify principles and
mechanisms of cooperation in this area.
Almost all CIS member states make efforts to enhance energy efficiency, in
particular, for the purposes of environmental protection. Environmental protection
was defined to be a priority objective of the CIS members’ energy policy. Working
out of mechanisms of energy saving programs implementation at the interstate
level is getting especially up-to-date.
Elaboration of energy saving and energy efficiency programs
implementation mechanisms at the interstate level is becoming an energy policy
priority of the CIS countries.
Gradual change of CIS countries’ fuel and energy balance structure is an up-
to-date task as well. Increase in the share of atomic energy (Armenia, Belarus) and
renewable energy sources – solar, wind, biomass and small rivers (Azerbaijan,
Armenia, Kazakhstan, Turkmenistan, Uzbekistan) – is considered as an alternative
to hydrocarbon resources.
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3.4. Prospective directions of cooperation within the CIS. The most efficient
approaches to developing cooperation between the CIS countries in the area
of energy saving.
At present the CIS countries continue to pursue a course on deepening
cooperation in the field of energy efficiency in order to:
• enhance safety of energy supply and fuel and energy resources use
optimization;
• find ways to harmonize legal and regulatory framework and to form a
unified norms and technological basis in energy and energy saving;
• carry out joint researches and development of advanced energy saving
technologies;
• coordinate joint activities in the area of environmental protection; monitor
and analyze main directions of energy saving development.
The issue of forming a unified normative and regulatory space in the field of
energy saving, including forming of common approaches and harmonization of
norms, regulatory and technological base of energy saving.
It would be reasonable to work out a framework program of energy saving
and energy efficiency on the basis of national programs as the main instrument of
integration and interaction in the field of energy saving. Elaboration of a joint
complex long-term energy efficiency action plan that would contain benchmarks,
concrete measures, funding sources, state support and normative base alteration
mechanisms etc. might become an effective instrument of development. To engage
into these activities all national bodies responsible for energy efficiency policy
implementation it is important to establish close cooperation at the level of sectoral
and regional authorized public bodies, development institutions, technological
agencies, innovation funds etc.
It would be reasonable for the CIS countries at this stage to consider
carefully the Belarusian experience of energy efficiency enhancement and
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opportunities of its adaptation to their own conditions. Republic of Belarus has
already implemented the whole complex of low-cost measures in the field of
energy saving and achieved considerable results.
To achieve positive results in the area of energy saving and energy
efficiency it would be reasonable for the CIS countries to consider at the high level
the issue of establishing of a concrete body/center on energy saving and an energy
saving and energy efficiency foundation that would be funded by joint
contributions of member states as well by other sources of financing.
Above mentioned body could be in charge of the following aspects
necessary to promote energy efficiency and energy saving:
• strengthening of coordination of national energy saving programs;
• finalizing of forming of the legal and regulatory base necessary for effective
pursuing of energy saving policy and promotion of this policy implementation at
the municipal and local levels, including elaboration of concrete norms and direct
acting standards;
• elaboration of economic mechanisms, financing schemes and energy serving
projects management system;
• assistance by establishing of joint ventures, including energy service
companies, for implementation of energy service technologies and energy service
projects management;
• expert evaluation of projects;
• exchange of scientific, technological and economic information in the area
of energy and energy saving;
• organization of trainings and special workshops for specialists;
• working out and support of implementation of joint energy saving and
environmental protection programs;
• joint elaboration and implementation of advanced energy efficiency
standards in the CIS countries;
• methodological support of energy saving:
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preparation of recommendations on quality improvement of basic
energy supplies and energy consumption statistics;
elaboration of tools for monitoring state policy influence and for
establishing model for energy short-, mid-, and long-term prognoses. These
instruments are needed for evaluation of energy policies’ strategies and
their possible influence on energy resources supplies and consumption;
analysis of barriers to energy efficiency and renewable energy state
policy implementation and elaboration of recommendations on their
overcoming.
• providing of the following measures in the field of energy saving:
establishing of an automated data bank on existing in the CIS
countries and in the world energy efficient technologies, facilities and
devices;
establishing of a normative and legal information data bank;
organizing of international workshops and conferences on urgent
energy efficiency and energy saving issues;
exchange of energy efficiency and energy saving teaching programs;
establishing of demonstrational objects and high energy efficiency
zones, exchange of experience in this area.
The purposes of such a foundation might be:
• strengthening ties with international financial institutions for the purposes
of working out of projects financial support and investments attraction schemes;
• carrying out projects on modern energy efficient equipment and RES
facilities production;
• ensuring financial guarantees of energy efficiency projects implementation;
• implementation of energy saving projects in the CIS countries on a
competitive basis;
• funding research and development.
Major CIS countries’ energy companies which are interested in developing
business within the CIS could become key partners in developing interstate
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cooperation in the field of energy efficiency and energy saving. A prospective
direction of cooperation is implementation of joint projects on construction of
central heating and power plants (CHPPs) and mini-CHPPs; pilot projects on
sharing of energy saving best practices in the CIS countries.
Moreover, a general concept of cooperation within the CIS should provide
for a comprehensive scientific and technological energy cooperation development
in the following directions:
• enhancing economy and energy efficiency on all stages – from production,
transformation, transport, distribution, storage to final use of energy resources;
• elaboration and exploration of qualitatively new technologies and methods
of use of unconventional and renewable energy sources;
• environmental and emergency safety of energy sources and stability of
energy and fuel supply of consumers.
First and foremost steps to deepen integration processes in fuel and energy
complex might be concentrated, first of all, on forming of a common energy saving
information space through establishing of experts and consulting network that
would dispose a permanently updated knowledge base on the following aspects:
• modern energy saving technologies and equipment;
• normative and legal mechanisms of energy efficiency and energy saving
measures implementation;
• successful and unsuccessful implemented pilot projects;
• intellectual projects used in shaping project decisions, optimizing
technological decisions in the field of energy efficiency and energy saving;
• normative-technical documentation.
Forming of an expert community and an open network communication, in
addition to information experience exchange at modern fora, exhibitions dedicated
to energy saving issues, specialized workshops might give an additional impulse to
cooperation development, investments attraction, acceleration of integration
processes and higher quality of decisions as well as have a positive effect on
national programs efficiency.
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Establishing of such a network may be realized within the framework of
further implementation of corresponding UNECE and UN ESCAP projects that
laid the foundation for establishment of the energy efficiency expert community
and made a considerable contribution to development of the CIS integration
processes. Such a network might be established in the framework of the CIS as
well.
3.5. Opportunities of deepening cooperation between the CIS countries within
the UN, other international organizations and initiatives for the purposes of
achievement of priority goals in the field of energy security, energy efficiency
and renewable energy
In 2011 the UN Secretary General put forward the initiative “Sustainable
energy for all” (SE4All) which provides that by 2030 the following objectives
should be achieved: ensuring of universal access to modern energy sources,
doubling of energy efficiency level and doubling of renewable energy share in the
world energy balance.
According to the UN data, today 2.6 billion people in the developing
countries use traditional types of biomass for cooking and heating and 1.3 billion
people lack access to electricity.
Therefore at present approaches to achievement of energy development
objectives both in the framework of sustainable development concept in general
and in terms of practical steps of arrangement of international energy cooperation
are being reshaped.
Sustainable development topics are being actively promoted within the UN
in the framework of implementation of Secretary General’s Initiative “Sustainable
energy for all” in the context of realization of Rio+20 Global Sustainable
Development Conference decisions, “Development agenda” as well as the UN
Framework Convention on Climate Change (UN FCCC) and the Kyoto Protocol to
the UN FCCC. Practical activities are also held in the framework of the UNDP,
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UNIDO and some other UN bodies and entities and other governmental and non-
governmental organizations.
Following the results of the Rio+20 Conference on September 24, 2012, the
UN Secretary General Ban Ki-moon took the decision to delegate functions of
Special Representative of the Secretary General for Initiative “Sustainable energy
for all”/Chief Executive of the Initiative to the UNIDO Director General
K. Yumkela (headquarters of the Chief Executive will be located in Vienna; a
special decision on this was taken by the Austrian government on December 13,
2012); the UN Task Force on shaping post-2015 development agenda was
established, as well as the UN Secretary General’s Consultative Council on the
Initiative “Sustainable energy for all” (two representatives of the Consultative
Council – Ban Ki-moon, UN Secretary General, and Jim Yong Kim, President of
World Bank) and the Executive Board (head of the Board – Chad Holliday,
President of Bank of America).
The fact that representatives of major banking and financial institutions were
engaged in the activities of these bodies and appointed to key positions indicates a
qualitative change in sustainable energy development issues perception and
increase of attention paid to them at the international level.
As regards the implementation of approaches to international energy
cooperation development, the activities held within the UN Task Force on shaping
post-2015 development agenda is gaining significance. At present global
consultations on energy role in sustainable development of the world and the UN
role in this process are being held within the Task Force. The aim of these
discussions is to propose a wide range of interested parties to come to a common
vision of the future world energy problems and the necessity to incorporate energy
issues into the post-2015 Development Agenda that will be implemented under the
auspices of the UN. The UN General Assembly adopted the resolution
(A/RES/67/215) on declaration of the decade 2014-2024 “The Decade of
sustainable energy for all”; in doing so, he emphasized the importance of modern
services in the field of environmentally sustainable energy supply pointed at
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eradication of poverty and at development in general. Therefore higher UN role in
forming of frameworks and approaches to international energy cooperation
development can be anticipated.
It seems advisable to develop cooperation between the CIS countries in the
framework of implementation of Secretary General’s Initiative «Sustainable
energy for all» both in the format of exchange of opinions and participation in
preparation of program/concept documents and through elaboration of regional
technological assistance projects that might be implemented in cooperation with
the UNECE, UN ESCAP, UNDP, UN Environment Programme (UNEP), Global
Environment Facility.
Active engagement of the World Bank Group and other financial institutions
into the implementation of the Initiative «Sustainable energy for all» in real terms
means a dramatic change in international energy efficiency cooperation issues, new
opportunities for the CIS countries and real opportunity to overcome one of the
main obstacles to energy saving projects implementation – lack of efficient
financial mechanisms.
In its recent report “Toward a Sustainable Energy Future for All” the World
Bank notes country and regional differences and emphasizes the necessity to work
out for each country and separate regions of our planet a unique set of mechanisms
for achievement of its objectives.
Armenia, Kyrgyzstan, Tajikistan and Moldova were the CIS countries that
officially joined the SE4All Initiative. The Russian Federation has supported the
Initiative as well.
It seems advisable to consider within the CIS the opportunities of
participation in the implementation of the Initiative, in particular, the opportunity
to work out a regional plan on SE4All implementation and determine priority goals
and directions of cooperation. It is also important to develop cooperation with the
World Bank Group and other international funders for the purposes of elaboration
of efficient energy saving financing mechanisms with due regard to specific
characteristics of regions.
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Conclusions
Distinctions in structure of production and consumption of energy resources
are an objective basis for expansion of trade and mutual integration of the CIS
Member States in the energy sphere.
Despite distinctions in structure of the fuel and energy balances, of the
economic situation and the state policies in the sphere of energy efficiency, the
countries meet similar difficulties in the implementation of national programs on
energy efficiency.
Practically in all the CIS countries the presence of outstanding financing
issues is one of the main obstacles in a way of energy saving policy
implementation.
There is a problem of increase in rates of the new capacities input with a
simultaneous growth of efficiency of their use present in all the CIS states beside
the modernization of generating capacities and the grid management system.
As a whole in all CIS countries, except for Turkmenistan and Azerbaijan, the
laws on energy saving do operate, the standard and legal base of the energy saving,
urged to provide a basis for policy realization in the sphere of effective use of
energy resources, has been already created or is in the process of development;
laws on energy saving and energy efficiency improvement have been adopted;
strategic documents on development of national economies have been approved. In
those the goals and objectives of energy efficiency improvement were set; national
programs and the plans of action have been developed, separate industry and
specialized programs have been shaped according to the national priorities.
At the same time, in a number of the states the standard and legal base has a
rather declarative character. Laws on energy saving do not contain mechanisms of
direct action in the majority of the countries, are poorly connected with other acts
regulating various issues on energy, ecology, etc. Standards of the legislation often
are not coordinated among themselves; there are gaps and outstanding issues. At
the same time, practically in all countries the international experience is actively
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studied and work on its adaptation to national conditions is carried out. In
particular, one may note a tendency of the legislation harmonization with EU
legislation in the energy efficiency sphere.
There is no integrated and phased approach to policy realization in the
sphere of energy efficiency improvement in the majority of the states in question at
present. As a rule, the system of target indicators of energy saving is insufficiently
developed, the monitoring and assessment mechanism is absent or is poorly
developed, the system of statistical information collecting is inefficiently adjusted,
there are no mechanisms of correction of the medium-term objectives and the
mechanisms of their achievement, the system of subordinate regulations and
standards is insufficiently developed, as well as mechanisms of economic
incentives of investments into energy efficiency are not worked out.
One may consider as the main obstacles on the way to the introduction of
energy saving actions: imperfection of the tariff policy and practices of cross
subsidizing, backwardness of the energy service and energy saving technologies
market, uncertainty on the issue of the long-term budgetary support of energy
saving, high investment risks, a low skill level of management on sites, insufficient
level of practice of economical use of the energy resources, insufficient
development of the market relations; absence of effective economic incentives for
investment in the fixed capital assets and implementation of energy saving
projects, imperfection of public administration and regulation in the energy saving
sphere, especially at regional and local levels.
The greatest successes were achieved by the states, in which along with in
details developed legislative base and necessary institutional infrastructure
(existence of separate body of the state administration responsible for energy
saving has the crucial value), clear task setting and planning were carried out (with
allocation of key indicators which are planned to be reached by fixed date), as well
as the system of the state policy in the energy efficiency sphere results realization
monitoring has been created. Besides, the budgetary financing of energy saving
projects has the extreme importance, even in the developed system of economic
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incentives, at the first stage of realization of the policy in the energy efficiency
improvement sphere.
Presently the CIS member states have the considerable potential of energy
saving. According to the experts and to data of national programs on energy
efficiency improvement, the unused potential of energy saving of the CIS makes
approximately 450 million t.o.e.
Such sectors as housing (housing and communal services), production of
thermal and electric energy and industrial sectors possess the greatest technical
potential for the energy efficiency improvement.
It is thus important to note that in all states except Belarus and Ukraine the
potential of low-cost actions for energy saving has not been realized so far. In
Belarus such potential is almost exhausted today.
Cooperation development within the CIS will allow to lower cumulative
expenses in the energy industry, to increase competitiveness of economy of the
Commonwealth States and reliability of energy supply.
Distinction in approaches to energy saving does not interfere with
development of the international cooperation. On the contrary, taking into account
similar technological base and other general factors of the development, the results
reached and the lessons learned are of interest to all states.
Orientation at the EU legislation and standards in the sphere of energy
saving does not interfere with cooperation within the CIS, but represents attempt to
adapt the best international practices to conditions of the Commonwealth States.
As a whole it should be noted an important positive role of the regional and
country projects of the international technical assistance implementation in the CIS
States. With the international support in CIS countries the energy efficiency
centers were created, pilot projects were realized and demonstration zones were
created, recommendations on use of the international experience taking into
account national specifics were prepared. Within such projects the countries had
received and keep receiving necessary consulting, methodological, organizational
and other help and support in realization of the national policy in the energy
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efficiency improvement sphere and the use development of their own energy
resources (unlike imported) and renewables.
Cooperation development within the CIS in the energy efficiency
improvement sphere actually means the concentration of resources on the priority
direction of development and allows gaining synergetic effect from the enclosed
resources at the expense of replication of results and receiving of an economy of
scale.
Besides, there are objective difficulties for implementation of the large-scale
projects in the majority of the CIS states. The implementation of large projects and
programs is possible within the CIS. On the one hand the realization of an
integrated approach to energy efficiency improvement and on the other the
maximum development of national industrial and technological and scientific and
technical base of the participating CIS states is moreover possible.
It is expedient to develop a Framework Program of energy saving and
energy efficiency on the basis of national programs as the main tool for integration
and interaction of energy saving policy of the states. Development of a joint
comprehensive plan of actions in the energy efficiency sphere on long-term
prospect with target indicators and with the indication of concrete actions and
sources of financing, mechanisms of the state support, modification of regulatory
base, etc. can become the effective development tool. It is important to adjust close
cooperation at the level of branch and regional authorized bodies, development
institutions, technological agencies, innovative funds, etc. for involvement in this
work of all national authorities responsible for realization of the policy in the field
of energy efficiency.
It may be useful for the CIS states to attentively study Belarus experience on
the energy efficiency improvement and the possibility of its application and
adaptation at this stage to their own conditions. Republic of Belarus has already
realized practically the whole complex of rather cheap actions in the sphere of
energy saving and reached good results.
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In order to achieve the successes in the energy saving and the energy efficiency it
may be useful for the CIS countries to consider at high level a question of creation
of the specific body/the center for the energy saving management, as well as the
energy efficiency and energy saving fund which would be financed by joint
contributions of the Member States, as well as at the expense of the other sources
of financing.
Creation of the expert community and an open network communication,
along with information exchange of experience at the joint forums, the exhibitions
devoted to energy saving issues and the specialized seminars could give an
additional impulse to the cooperation development, the investment attraction, the
acceleration of rates of integration processes and the quality of decisions made,
will positively affect the national programs effectiveness.
It appears important to develop the cooperation between the CIS countries
within realization of the UN Secretary General Initiative "Sustainable Energy for
All" (SE4All) as in a format of an opinion exchange and participation in
preparation of the program/conceptual documents, as by development of regional
projects of technical assistance which can be realized with assistance of UNECE,
UN ESCAP, the UN Development Programme, the UN Environment Programme,
and Global Environment Facility.
Active involvement of the World Bank Group and other financial institutions
in realization of SE4All initiative in practice means new opportunities for the CIS
states and the international support in overcoming of one of the most important
obstacles for the energy saving projects implementation – the lack of effective
funding mechanisms.
It seems useful within the CIS to consider the possibilities of participation in
the initiative realization, in particular - development of the regional plan of action
on realization of SE4All initiative, as well as to define the priority objectives and
the cooperation directions. Also it is important to develop actively the cooperation
with the World Bank Group and other international donors for the development of
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effective energy saving projects funding mechanisms taking into account the
specifics of the region.
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ANNEXES
Brief Overview on the CIS Countries
Annex 1. Republic of Azerbaijan
According to IMF, in 2011 the GDP of Azerbaijan on PPP made $93.1 bln.
that is 2.2% more in comparison with a similar indicator of previous year. In 2011
growth rate of real GDP in comparison with 2010 made 0.1%.
In structure of Azerbaijan's GDP for 2011 67% - is the share of the industry
27% – services sector, 6% –agriculture. Among industrial production an important
role is played by a mining industry (76%). In 2010 in structure of the export the
share of income on crude oil was 86.5%, oil products – 6.0%.
According to MEA, in 2010 primary consumption of energy in Azerbaijan
made 11.8 million TOE, and production – 65.4 million TOE. Production of energy
resources is presented almost exclusively by oil (78.2%) and natural gas (21.3%).
Consumption of the PER also consists of natural gas (66.1%) and oil products
(31.4%). HPPs have small shares.
Azerbaijan is the large producer of oil and natural gas. According to BP as
of 2011, Azerbaijan has 0.6% of the proved reserves of gas in the world and 0.4%
of the oil.
In the period of 2000-2011 oil production in Azerbaijan grew by 3.2 times
and reached 45.6 million t (in 2009-2010 – over 50 million tons/year). The share of
offshore fields in oil production in the country makes 96%. According to the UN,
oil export in Azerbaijan in 2011 made 27.8 million t. The country completely
provides internal needs for oil products and carries out their export deliveries.
In 2000-2011 gas production in Azerbaijan grew almost by 3 times and reached
14.8 billion cubic meters. The main fields – the shelf Shah-Denise, Bakhar, Azeri-
Chirag-Gyuneshli.
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According to BP, in 2011 gas export in Azerbaijan made 7.18 billion cubic
meters (prior to 2007 the country was a net importer), and all the volume was
delivered via the pipelines.
The main legislative acts in the energy efficiency and the RES sphere:
• The Law of 1996 "On Expenditure of Energy Resources";
• The Law of the Azerbaijan Republic of November 24, 1998 No. 541-IQ "On
Energy Industry";
• The Law of April 3, 1998 No. 459-IQ "On Electrical Power Industry";
• The Law of December 28, 1999 No. 784-IQ "On Electrical and Heat Power
Plants".
The Ministry of Industry and Energy of Azerbaijan is the main body of a
state administration in the sphere of the energy efficiency improvement. Presently
the Ministry of Industry and Energy of Azerbaijan considers possibility of
establishment of the Energy Efficiency Agency.
With assistance of the interstate program of cooperation of the European
Union INOGATE ESIB the draft-law on energy saving was developed. Presently
the draft passes through a stage of interdepartmental discussion. It is planned that
in a package with it about 20 regulations shall be approved, though in the long
term their number may be significantly increased.
I n 2012 the policy review in the energy efficiency sphere was carried out by
the joint group of experts of EU and the Secretariat of the Energy Charter.
By results of research it was noted that, despite attention increase in
Azerbaijan to problems of energy saving and RES development, the specified
questions are still insufficiently reflected by the policy pursued by Azerbaijan. In
particular, development of strategy, the plans of action and the legislation is
required. Today the only measures, which are carried out in the field of energy
efficiency, are in fact the measures financed at the expense of foreign technical
assistance.
Following the results of the review it is recommended to the Government of
Azerbaijan to reflect in the Energy Policy a potential contribution of energy
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efficiency to increase of fuel export, assistance to economic growth and in
environmental protection, as well as to give a high priority to a problem of the
energy efficiency improvement and the renewable energy use. It is necessary to
carry out the detailed analysis of the energy efficiency economic potential in all
sectors of economy and to estimate the obstacles that exist on the way of
realization of this potential.
Azerbaijan's GDP energy intensity on PPP in 2010 made 0.130
TOE/thousand dollars. The Government set the goal on energy efficiency
improvement to reach 20% by 2020.
In 2000-2009 the efficiency of a power supply system of the Republic
increased from 30% to 37.5%, specific fuel consumption reduced from 411 to 327
g/kWh, and losses in an electric network – from 15 to 8.5%.
The State Program on the renewable and alternative energy sources use in
the Azerbaijan Republic approved in 2004 is realized.
The main objectives of the State program on the renewable and alternative
energy sources use:
- implementation of scientific and technical and organizational measures for the
purpose of efficiency increase in the industrial sphere,
- increase in investments into energy industry,
- improvement of an ecological situation in the country.
The State Program provided for the construction of the new heat and hydro
power plants in the country, the modernization of the existing generating capacities
and the expansion of use of renewable energy sources.
For implementation of the Program the Agency concerning the issues of the
alternative and renewable energy sources development under the Ministry of the
Industry and Energy (2009) and the State Company on the alternative and
renewable energy sources development (2012) were created.
Only the small pilot projects on the RES use were carried out in Azerbaijan.
However, the increasing attention has been paid recently to studying of the RES
potential.
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In 2012 the development of the State strategy on the alternative and
renewable energy sources use for 2012-2020 and the preparation of the Program in
which pilot areas of development of alternative energy and perspective
technologies are defined were complete.
The goal is set on achievement of 20% share of alternative energy in a total
amount of energy consumption in Azerbaijan by 2020.
Azerbaijan had been receiving help from EU in total of 13 million Euros in
2010-2012 for reforming of the energy sector during which the plan of action
providing specific steps for advance of obtaining energy from RES must be
developed. For achievement of the specified goal the preparation of the RES
database in Azerbaijan is conducted.
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Annex 2. Republic of Armenia
Armenia depends on import of hydrocarbons and attaches great value to the
energy efficiency improvement and decrease in GDP energy intensity.
Standard and legal basis of the policy of energy saving realization is the Law
on Energy Efficiency and Renewable Energy of 2006. The Ministry of Energy is
the main executive authority responsible for carrying out policy in the energy
efficiency field.
The industrial sector consuming 40% of the whole primary energy has the
greatest potential for the energy saving, and first of all - power industry, production
of construction materials, the mining and chemical industry, then follows the
transport sector - 24% of primary energy.
The housing-and-municipal sector consumes about 15% of total amount of
energy consumption. Despite the estimated essential potential of this sector in the
field of energy efficiency, introduction of energy saving actions is complicated
because of the large volume of necessary investments and the average level of the
population income.
The agricultural sector also opens opportunities for further energy saving at
4% of the general energy consumption. The task becomes complicated for the low
level of financing of rural areas and the lack of highly qualified personnel in the
agricultural production processing sector.
The National Program on Energy Efficiency and Energy Saving of the
Republic of Armenia (2007) is the main program document in the field of energy
saving and energy efficiency.
The National Program is aimed at achievement of the following goals:
1. maintenance of Armenia's economy sustainable development;
2. reduction of dependence of the country from foreign deliveries of energy
and avoidance of interruptions in supply of the Armenian fuel, by means of
development of energy saving and renewables;
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3. the most effective use of sources of fuel energy and renewables, by means of
introduction of modern technologies and the practices of control and management.
The main mechanisms of the energy efficiency improvement specified in the
Program:
1. Determination of the energy saving potential in all sectors of economy and
its realization;
2. Increase in efficiency of fuel and energy resources in all sectors of economy;
3. Application of advanced technologies and work plans/schedules for
consumers of fuel and energy resources;
4. Ensuring available consultation concerning effective use of resources and
products for consumers of fuel energy.
As a result of the program implementation the following is planned:
• to reach the energy consumption reduction by 15% by means of a
gravitational current of waters use and introduction of new technologies at drinking
water pump stations;
• to save 475 million kWh for the 10-year period by means of introduction of
energy saving lamps in lighting systems;
• to reduce the relative energy consumption by 5% in the mining industry by
means of introduction of the energy effective equipment (large flotation machines
and stone crushers);
• to increase the energy efficiency in the chemical industry by 23% by means
of modernization of technological processes and the equipment;
• to reduce the energy consumption of the food industry by 35-40% at the
expense of introduction of modern technologies and the equipment.
The main directions of realization of energy saving actions in the industry:
• elimination of mistakes and improvement of technological processes,
realization of organizational measures, reduction of operating time of the
equipment at no load;
• introduction of new energy effective technologies and automation of electric
drives;
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• use of secondary energy resources;
• improvement of thermal isolation of furnaces and heating networks;
• use of energy saving lighting lamps;
• introduction of new energy effective technologies.
The lack of researches in the area of the most effective actions of the fast
energy efficiency improvement in two main energy-requiring sectors is felt
presently: transport and heating of buildings.
Absence of information on advantages of investments into energy efficiency
interferes with realization of the existing economically expedient potential.
Consumers don't have information concerning overall performance of the various
equipment intended for their enterprises, and many companies need professional
development of the personnel and acquaintance with the saved up experience for
creation of the investment plan in energy efficiency. Consumers are often inclined
to revaluation of expenses of investments in the energy efficiency.
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Annex 3. Republic of Belarus
Since 1995 the Government of Republic of Belarus relied on FER use
efficiency increase and thermal and electric energy losses decrease. In Republic of
Belarus purposeful work on creation of the state system of the energy efficiency
improvement in the economy is carried out: the legislative base, institutional
structures, mechanisms of the state support and stimulation, system of target
indicators and state programs with monitoring of their performance are created.
Significant GDP growth didn't lead to essential change of levels of primary
and final energy consumption. In 20 years (1990-2010) GDP energy consumption
of Belarus was reduced by 2.7 times, and gross consumption of FER – by 1.6 times
with GDP growth over than by 2.5 times. Presently the energy consumption of
economy is 1.4-1.8 times lower, than in the Russian Federation, Ukraine,
Kazakhstan and other countries of the former Soviet Union, but still 1.5-1.8 times
higher than the average across Europe.
Realization of programs and actions for implementation of a State Policy
allowed to increase a share of own energy resources in balance of production of
thermal and electric energy from 2.8% in 1990 to 25% in 2012.
Currently the policy in the sphere of energy saving is aimed at the structural
changes of national economy and its modernization on the basis of energy effective
technologies. The following goals are set:
• to reduce GDP energy consumption in comparison with 2005 level by not
less than 50% in 2015 and not less than 60% in 2020;
• to reach the total amount of economy of FER on comparable conditions on
GDP for not less than 7.1-8.9 million TFOE in 2011-2015 and not less than 5.2
million TFOE in 2016-2020;
• to provide a share of own energy resources in balance of boiler and furnace
fuels of 30% by 2015 and 32% - to the 2020.
These goals are planned to be reached by means of realization of actions for the
energy saving, aimed at improvement of the branch structure of economy,
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introduction of modern energy effective technologies and the equipment,
development of economic and organizational mechanisms of stimulation of energy
saving, system of the accounting and control of energy consumption, an energy
audit of the organizations and branches, increase of the energy efficiency level by
standardization methods, expansion of a range of scientific researches.
The demand and offers increase in the market of energy effective
technologies and the equipment is noted in Belarus. There is a demand for services
in management of projects and implementation of turnkey construction projects
and in carrying out energy inspections of the enterprises.
In accordance with the plan of action determined by Strategy of
Development of an energy potential of the Republic of Belarus, at present the
Government undertakes active measures for improvement of tariff policy by stage-
by-stage optimization of a price level on energy, creation of economic incentives
for use of energy saving technologies in productions and economy of energy
resources of consumers; stage-by-stage elimination of cross subsidizing in tariffs
for energy carriers, including for the population.
Strategy of the energy potential development of the Republic of Belarus
defines a stage-by-stage complete elimination of cross subsidizing in tariffs for
energy resources in Belarus by 2014-2015.
In Belarus over 30 acts of the legislation operate regulating the public
relations in the sphere of energy saving, including the international contracts of the
Republic connected with realization in the country of the energy saving policy.
Presently the concept of the draft of the new Law "On Energy Saving" is
developed.
The main strategic documents which are legislatively fixing a state policy in
the sphere of energy efficiency and energy saving are:
• The program of social and economic development of the Republic of
Belarus for 2011-2015; approved by the Decree of the President Belarus No. 136
of 11.04.2011;
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• The directive of the President Belarus of 14.06.2007 No. 3 "Economy and
thrift - the main factors of economic safety of the State";
• The Concept of energy security of the Republic of Belarus; approved by the
Decree of the President of Belarus No. 433 of 17.09.2007;
• The Strategy of development of an energy potential of the Republic of
Belarus; approved by the resolution of the Republic of Belarus Council of
Ministers of 9.08.2010 No. 1180;
• The Republic's Program on energy saving for 2011-2015; approved by the
resolution of the Republic of Belarus Council of Ministers of 24.12.2010 No.
1882;
• The National Program of development of local and renewable energy
sources for 2011-2015; approved by the resolution of the Republic of Belarus
Council of Ministers of 10.05.2011 No. 586 and other specialized programs in the
field of the energy efficiency improvement and development of use of local types
of fuel and RES.
The main institution responsible for development and carrying out the State
Policy in the field of energy efficiency and renewable energy, monitoring of
realization of the Policy and ensuring the State supervision of rational use of fuel,
electric and thermal energy, is the Energy Efficiency Department of the State
Committee on standardization of Republic of Belarus.
In each ministry and the regions there are administrations and the committees
responsible for implementation of programs on energy saving, performance of the
established indicators. Both state, and private enterprises are obliged to include in
the business plans the goals and tasks on energy efficiency which will allow to
provide them with the performance of the established indicators.
The system of monitoring of execution and the reporting to the Energy
Efficiency Department of the State Committee on Standardization is organized.
The potential of low-cost actions is almost exhausted in Belarus by now.
The important role in energy efficiency stimulation at an initial stage was
played by the budgetary subsidies allocated for realization of priority actions. In
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1996-2005 nearly a half of investments were carried out from the state sources and
about 40% at the expense of own means of the enterprises. Gradually the structure
of financing changed and in 2006-2010 own means of the enterprises became the
main source, individual share of the state made about a third, the share of the
borrowed funds grew to 10% from the whole amount of financing. The volume of
investment into energy saving annually grows. In 2010 in energy saving $1172.3
million were invested that by 24.6 times exceeds the level of 1996. In 2010 loans
and the raised funds made already nearly a third of all financing at individual share
of the state sources about a quarter. In structure of financing of energy saving for
2011-2015 the increase in a share of the credits, loans and other raised funds to
20% is provided.
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Annex 4. Republic of Kazakhstan
Kazakhstan possesses large supplies of all primary energy resources, at the
same time in the country much attention is paid to the issues of energy saving and
energy efficiency improvement.
At the current stage the following tasks which can be solved by introducing
the energy saving technologies are the most actual for Kazakhstan:
• release of generating capacities in the conditions of possible deficiency at
the expense of decrease in energy consumption of primary branches of economy,
and
• increase of competitiveness of the Kazakh goods and services at the expense
of decrease in their prime cost.
Activity in the energy saving issues demanded development of the
legislative standard and legal base.
The beginning to process of formation of a State Policy in the field of energy
saving in the Republic was put by the Adopted Law of the Republic of Kazakhstan
of December 25, 1997 No. 210-I "On Energy Saving". At the same time many
important requirements of legislators from the point of view of energy saving were
not supported with concrete norms. In this regard the new law "On Energy Saving
and Energy Efficiency Improvement" was prepared and approved. The draft-law
"On a Heat Supply" is also prepared and now passes coordination.
The policy in the field of energy efficiency and energy saving is defined by
authorized body - the Ministry of the Industry and New Technologies.
Coordination, realization and monitoring of all listed actions is assigned to
authorized body in the energy saving sphere, local executive bodies and future
Institute of Power Industry and Energy Saving Development.
As authorized body in the sphere of control and supervision of execution of
requirements of the Law "On Energy Saving and Energy Efficiency Improvement"
the Committee of the State Energy Supervision and Control of the Ministry of the
Industry and New Technologies which also carries out accreditation of energy
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auditors is defined. The operator for formation and maintaining the State Energy
register determined JSC "Kazakhenergoekspertiza" by the Government Resolution.
This register will include the enterprises consuming over 1500 tons of conditional
fuel.
The Program of the Kazakhstan Power Industry Development till 2030
approved in 1999 defined the directions of energy saving policy for electricity
generation. For operating plants the main indicator of overall performance is the
decrease in fuel consumption on production of 1 kWh of electric power. Input of
new capacities has to be carried out only at the expense of use of the last
achievements of scientific and technical progress. One of the priority directions of
development defined use of renewable energy resources, as well as utilization of
the associated oil gases for the purpose of electricity generation.
Realization of goals assumes first of all the fight against losses in production
and transmission of energy, the organization of the accounting of all released
energy, decrease in losses in electric and thermal grids.
At present there is a huge need for equipment modernization practically in
all industries.
The industrial sector of Kazakhstan is five times higher in energy
consumption than a similar indicator of EU countries. Considerable share of public
institutions (school, hospital, etc.), as well as the residential buildings are equipped
with inefficient energy systems and require updating.
In this regard, the following are developed and are carried out: State Program on
Forced Industrial and Innovative Development of the Republic of Kazakhstan;
Industry Programs, the "Productivity 2020" Program, the Program on Development
of Innovations and Assistance to the Technological Modernization which are
focused on technological modernization of all industries and development of
scientific and technical potential of the industry. Thereby, these measures directly
will influence increase of energy efficiency of economy as a whole.
At the end of 2011 the Comprehensive Plan on Energy Efficiency
Improvement in the Republic of Kazakhstan in 2012 - 2015 was accepted. It
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includes a number of the initiatives proposed and discussed within cooperation
with the European Union and the international organizations for realization of
which the technical and financial support of the World Bank, the UN Industrial
Development Organization (UNIDO), etc. is provided. In particular, the measures
and actions offered by UNIDO for example the energy management systems
(EnMS), standards and potential building of experts and the enterprises were
included in the plan.
The Program on Housing and Communal Services Modernization till 2020 is
approved.
Main objective of the Comprehensive Plan on Energy Efficiency
Improvement for 2012-2015 is the decrease in GDP energy consumption by not
less than 10% by 2015 comparing with the 2008 level.
Target indicators broken down by the main sectors of economy:
• The Industry Sector – ensuring annual economy of primary energy resources
by not less than 2.0 million TOE;
• The Energy Sector – ensuring annual economy of primary energy resources
by not less than 3.0 million TOE;
• The Housing and Communal Services and the Budgetary Sector – ensuring
annual economy of primary energy resources by not less than 3.7 million TOE.
The objective of the plan is realization of a complex of the legislative,
organizational, scientific, technical, economic and financial measures aimed at
reduction of inefficient consumption of fuel and energy resources.
The Concept of the Electric Power Branch Development of the Republic of
Kazakhstan till 2030 on the basis of which the Industry Program of the Power
Branch Development till 2030 will be developed is under consideration of the
Government. As a part of the Program an Article on energy efficiency
development is planned.
Thus, a lot of work on improvement of standard and legal base of energy
saving has been carried out in recent years in Kazakhstan, the control system is
improved, the energy efficiency improvement potential in the economy sectors is
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studied, the system of target indicators and priority actions for branches is created,
the attention to training issues is paid. It is important to note also the work carried-
out on studying and adaptation of the international experience in the sphere of
energy efficiency and systematization of the international cooperation.
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Annex 5. The Kyrgyz Republic
The Kyrgyz Republic possesses large supplies of energy resources and is
capable to provide with them its' own requirements substantially. However,
presently efficiency of functioning of many energy companies decreased, the
branch endures considerable financial and economic difficulties. There is a
dependence of the republic on import of coal, natural gas, oil products. In structure
of fuel and energy balance of the republic import makes more than 50%.
About 5% of GDP and 16% of industrial output, 10% of the income of the
state budget fall to the share of power industry. The electrical power grid provides
access to the electric power practically for all population. The hydro energy
potential of 252 large and average rivers is estimated at 18.5 million kW of power
output and over 160 billion kWh of electric power. Potential of hydro power
resources of the small rivers and water currents makes about 5 billion kWh - 8
billion kWh a year, but only 3% is used.
In the structure of primary energy resources production the leading place is
taken by hydraulic energy with a share of more than 75%. Coal mining in the
country provides about 16%. The total share of oil and gas is 8.3%. Kyrgyzstan
possesses 30% of hydraulic energy resources of the region from which only the
tenth part is mastered. Hydraulic energy is the most important component of the
whole fuel and energy complex of the country.
In GDP structure the agriculture weight – 24.5% is considerable. The
industry makes 25.8% of GDP, a services sector - 45.2%.
Priorities of the power industry development in the short term are:
• development and implementation of practical measures for reduction of
energy losses;
• strengthening of commercial and financial discipline and achievement of
profitability of the branch subjects;
• modernization and accumulation of production potential and generating
capacities of electrical power sector and increase of its efficiency on the basis of
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use of new equipment, introduction of automated control systems and optimum
regulation of production schedules;
• input of new generating capacities and transferring power lines;
• active participation in processes of interstate integration by the countries of
the Central Asia, the CIS in the field of power industry on a bilateral basis, in
preparation and creation of the uniform competitive market of electric energy and
power;
• carrying out reform of a control system by electrical power sector,
management improvement, creation of a necessary institutional framework and
regulatory legal base, completion of structural reform of sector;
• ensuring realization of the balanced tariff and price policy providing a
covering of the actual expenses of the energy companies on production, transfer
and distribution of electric and thermal energy and reduction of cross subsidizing;
• improvement of a hardware of systems of the commercial account with
transition to creation of the automated energy monitoring and metering systems
(AEMMS);
• creation of the full value domestic energy market with providing the
competitive environment in the field of development and electric power sale by
construction of small HPPs and other alternative sources;
• taking measures to preservation of competitive advantage of Kyrgyzstan in
the regional export market of the electric power and to development of an export
potential;
• improvement of conditions for the private investments attraction into sector
development on a basis and the principles of public-private partnership;
• strengthening of potential of energy saving in production, transfer and
consumption of energy resources.
The share of household sector considerably increased in the structure of
consumption of fuel and energy resources by branches for the last 20 years and the
share of the industry and agrarian sector decreased. Now the population consumes
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about 60.5% of all electric power put on domestic market; the budgetary sphere –
10.5%; and the industry, agriculture and commercial consumers – 29%.
In the structure of fuel and energy balance essential shifts are also noted –
the coal consumption strongly decreased and, in this regard, the heating, the hot
water supply and cooking is carried out at the expense of the electric power
nowadays. If in 1990 the population consumed 1 billion kWh, in 2010 – it was
already 3.64 billion kWh of the electric power, at strong seasonal fluctuation:
winter electricity consumption is 3.5 times more than the summer.
Operating tariffs do not stimulate producers in the Kyrgyz Republic and
consumers of energy resources to reduce costs of energy. In this regard,
improvement of operating tariff policy in the energy industry is required.
Issues of energy efficiency improvement are under authority of the Ministry of
Energy and Industry.
The standard and legal base in the sphere of energy efficiency improvement
includes the following main acts:
• Law on Energy Saving;
• Law on Power Industry;
• Law on Renewable Energy Sources;
• Law on Energy Industry.
Kyrgyzstan realizes the Program on Energy Saving till 2015. Within the
program performance of energy saving actions and measures for the energy
efficiency improvement will be carried out soon in the following directions:
• preparation of drafts of legal and normative documents for implementation
of requirements of the Law "On Energy Saving" and performance of measures for
the energy efficiency improvement;
• reconstruction of the existing energy and energy-intensive enterprises,
modernization of the energy sector, thermal insulation of buildings, construction of
buildings in which energy resources are consumed more effectively;
• use of local energy resources;
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• restructuring of the industry making construction materials, start of
production of energy saving and thermo insulation materials;
• development, production and installation of the equipment and systems for
metering and regulation of hot water, steam, natural gas, the electric power usage
volumes.
The country solves problems of achievement of financial and economic
improvement of the energy branch, commissioning of new generating and
transferring capacities, increase in a share of renewable energy in production
structure, to energy efficiency improvement at the expense of energy saving, the
increase of consumers energy supply reliability and carrying out socially
acceptable tariff policy by 2014-2015.
Main objectives of the Energy Saving Policy in Kyrgyzstan are: rational use
of energy by its production and consumption at the expense of active introduction
of energy saving and innovative technologies, as well as the renewable energy
sources.
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Annex 6. Republic of Moldova
The economy of Moldova is represented by the following major sectors:
industry (13.82 %), agriculture (12.2 %), wholesale and retail trade (13.8 %),
transport and communications (10.7 %), building (3.4%).
There is a small number of hydrocarbons in Moldova. Moldova imports 96
% of energy resources.
Oil-product extraction from south production field in Moldova is rather
small compared to the demands of the country.
Gas industry regulation is mainly provided by JSC “Moldovagas”. There is a
gas transmission network in Moldova.
Power generation from countries own energy resources was 1.016 billion
kWh in 2011, total electric power consumption on the right bank of the Dniester
river in 2011 was 3,571 million kWh.
Public administration in the field of energy efficiency is performed by the
Government of Moldova, which has the following functions:
• to identify priorities in state energy efficiency policy;
• to approve national energy efficiency programs and plans of actions;
• to develop and apply energy efficiency tools and financial instruments for
energy saving;
• to identify organizations, structures and key activities for energy efficiency
improvements to be undertaken by state bodies.
The main administrative body that identifies key areas of energy efficiency
development is the Ministry of economy. Agency for energy efficiency and
renewable energy is an administrative body subordinated to the Ministry of
economy.
Energy efficiency issues are stated as priorities in many documents in energy
sphere, transport industry and economic development, particularly:
1) Energy efficiency law;
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2) National development strategy: 7 solutions for economic expansion and
poverty level reduction. Moldova-2020;
3) Energy strategy until 2030;
4) Renewable energy law;
5) National energy efficiency program 2011 – 2020;
6) National efficiency action plan 2013 – 2015.
General goals are specified for each energy sector:
1) Power sector: to promote investments into power generation, including
renewable electricity generation; to promote consumer electrical equipment and
energy products produced in compliance to EU energy efficiency requirements;
2) Thermal power sector: to reduce the loses in transport and distribution grids, to
promote new energy efficient technologies;
3) Natural gas: to address opportunities for renewable energy sources development
in National gasification program and to study potential and opportunities for biogas
production and utilization in public facilities;
4) Industrial sector: to promote investments in order to replace ineffective
technologies with energy efficient technologies;
5) Building sector: to develop administrative, legal and financial potential in order
to apply measures for energy efficiency increase in housing, to promote state and
private investment into energy-efficient buildings.
6) Transport:
• to stimulate biofuels as a part of traditional fuels and to promote fuel
efficient tires;
• to reduce fuel consumption by introduction of electrical and rail transport, to
replace old transport with energy efficient models;
7) public sector: to develop the following programs: street lighting improvement,
low and net zero-energy buildings, renewable heating etc.
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Annex 7. Russian Federation
Energy intensity of GDP in Russia is 7 times higher than in Japan and 4.5
times higher than in USA. In housing and community services consumption of heat
and water is 3 times (actual data: 4 – 5 times) higher than in Finland and Norway.
Technical potential of energy saving in Russia is estimated to be between
420 to 480 mil toe. The highest technical potential of energy efficiency increase is
in the following sectors: housing, power generation and industry. Energy
efficiency increase potential in final consumption is higher than in energy
production.
Russia has recently begun to develop and implement state energy efficiency
policy. Existing legal framework has mainly been developed in the past 6 years. At
the same time energy saving is one of key tasks of economic development.
International experience is taken into consideration during the state policy
development.
The main aim of energy saving policy in Russia is to reduce energy intensity
of GDP until 2020 by minimum 40 % (compared to 2007). The resources saved are
considered to be the main factor of economic growth.
Currently main energy saving goals and objectives, as well as regulation and
promoting instruments have been identified. Energy saving public administration,
energy efficient technologies’ and services’ markets are being constructed. It is
planned to develop a system of indicators for energy efficiency performance
assessment, and to develop regular assessment and monitoring.
The state regulatory framework for energy saving in Russia is represented by the
following legislative acts:
• Presidential Decree No. 889, 4 June 2008 “Concerning some measures for
improving energy and ecological efficiency of the Russian economy”, which
established a goal of a minimum 40% reduction in energy intensity of the Russian
economy by 2020 compared to 2007;
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• Federal Law No. 261-FZ, 23 November 2009 “On energy saving and energy
efficiency increase and on amendments to certain legislative acts of the Russian
Federation”;
• Other legislative acts and regulations, state program “Energy saving and
energy efficiency increase for the period until 2020”, adopted by Government
Decree dated 27 December 2010 No. 2446-р, other regional, municipal and
companies programs.
The Ministry of energy of Russian Federation is the key governmental body
that develops state energy efficiency policy.
State program “Energy saving and energy efficiency increase for the period
until 2020” is being implemented at present. Measures of the state program focus
on all sectors of the Russian economy and social sphere. The program consists of
industrial subprograms, as well as a regional energy saving and energy efficiency
program, and administrative subprogram on methodology, information and human
resources issues for program implementation.
There are two types of measures in the Program: cross-functional measures
(eligible for all or several sectors of the economy), and specific measures used in
specific sectors depending on their technical features. The Program includes
measures on inefficient capacities and technologies replacement with innovative
and new progressive technologies in building and modernization. As the result the
Program has been developed in an integrative approach.
During the last two years when state program has been implemented energy
intensity of GDP in Russia has decreased by more than 5.5 %.
State energy efficiency policy in Russia is consistent; the Program is
financed both from budget and non-budgetary resources. It is important to notice
that annual federal budgeting spending on the state program implementation
account for 7 billion rubles (in 2011 – 2013).
Regional energy saving and energy efficiency programs have been developed in all
Russian regions. These programs include heating systems modernization projects,
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smart metering equipment deployment, efficient street lighting, metering devices
installation, utilization of energy efficient building materials.
Implementation of regional energy saving and energy efficiency programs in
2011 cost 47 billion rubles.
In 2011 most subsidies from federal budget were allocated to the following
regional programs’ measures: mandatory energy audits of state and municipal
buildings (14% of all subsidies, equal to 777.3 billion rubles), installation of
energy metering devices (12.2%, 646.5 billion rubles), replacement of
incandescent lamps with energy efficient lamps (5.4% or 287.3 billion rubles).
Another priority for federal budget financing had pre-investment phase projects
that create conditions to attract investors into region.
Federal energy service company as well as 100 other ESCOs have been
established. In practice, however, energy service contracts are not functioning well
and energy service market is developing slowly.
Preliminary results of the state program show that a sufficient and
comprehensive legal and regulatory framework for energy saving has not been
established yet. In many sectors of economy investors cannot gain from energy
saving. However a monitoring and assessment system has already been created, as
well as the goals adjustment process and energy efficiency increase instruments.
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Annex 8. Republic of Tajikistan
There are significant reserves of renewable energy sources in the Republic
of Tajikistan. The most widely used type of renewable energy sources is
hydropower, which is considered to be the most efficient and cheap renewable in
Tajikistan. Hydropower reserves in Tajikistan that can be explored and developed
are 3.5 times higher than the Central Asian electricity consumption.
The biggest share of gas is imported from Uzbekistan.
The main priorities of fuel and energy complex that are expected to provide
energy security include:
• to develop potential hydropower reserves of big and small rivers;
• to develop internal and external power grids and systems;
• to develop new deposits, improve existing capacities in oil, gas and coal
industries;
• to develop new, modernize and develop old coal TPS;
• to create technical potential for non-conventional energy sources (solar
energy, wind energy, geothermal energy).
Electric power complex of Tajikistan is operated by state vertically
integrated Joint Stock Holding Company “BarkiTochik”. There is no regulatory
body in gas industry. The tariffs are based on the price of natural gas imported
from Uzbekistan.
State utility company “TajiktransGas” is responsible for distribution and
delivery of natural gas to end users.
The most important political issue in energy efficiency is to develop
renewable energy and to reduce consumption of non-renewable energy sources, to
increase attractiveness of investments.
Another important issue is to provide secure and sustainable energy supply
in isolated and remote regions, as well as for small and medium sized business.
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The Ministry of energy and industry is responsible for the development and
implementation of state energy efficiency policy. Energy saving regulatory
framework consists of:
• Energy law;
• Energy saving law;
• Renewable energy sources law;
• Targeted integrated program on renewable energy including river energy,
solar energy, wind energy, biomass;
• Program on hydro-energy efficiency and conservation 2012 – 2016;
• Presidential decree of the Republic of Tajikistan “On additional measures for
economical energy use and energy saving”;
• Concept on fuel and energy complex industries development in 2003 – 2015.
Energy policy is based on energy systems integration principle.
Plan of actions on the implementation of priority projects in energy industry
in the Republic of Tajikistan from 2010 till 2015 is approved. The plan includes
building of priority power facilities that will provide energy security and
opportunity for electricity export to neighboring countries. The plan contains
priority projects, completion period, financing sources etc.
The program on hydropower efficiency and conservation for the period 2012
– 2016 is focused on major issues of hydro resources saving, implementation of
EE&ES plans and measures, rational power energy utilization and reduction of
energy losses, modernization of exciting capacities.
According to experts estimates after implementation of measures stated in
Program and Plan the republic will achieve energy independence and will have
own electricity sources for internal needs and will export its cheap electricity.
The Government of Republic of Tajikistan approved decree “Regulation of the
glow rate of thermal and electrical energy in national economy”. In order to
improve energy supply another Government decree “Small-scale power
generation” was adopted.
Comprehensive state policy will focus on the following objectives:
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• to improve regulatory and legal framework in order to provide free transfer
of capital, human resources and technologies between fuel-energy complex of
partner countries;
• to develop a mechanism for better communications at markets of different
countries based on the principle of mutual interests of partner countries;
• to contribute to creation and promotion of transnational energy companies,
corporations and consortiums;
• to develop mechanisms regulating mutual non-payment in energy sphere,
including clearing agreements, note offset agreements, common ownership
agreements.
It is important to notice that reforms include financial rehabilitation of the
industry by payment regulation and energy tariff growth. The most important
measure at this period is to make amendments into the legislation in order to
establish an independent regulatory body in power industry; to reform tariff policy
for making private sector participate in the next steps of restructuring.
Because of the lack of generating capacities and the necessity to address
social issues the Government of Tajikistan from 1 October 2009 made mandatory
for all the budgetary organizations, manufacturing facilities and commercial
enterprises as well as the population utilization of energy saving light bulbs.
241,000 of low-income households were provided with energy saving light bulbs
from the federal budget. As a result daily electricity consumption in the country
was reduced by 7 – 8 mln kWh.
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Annex 9. Turkmenistan
Turkmenistan is self-sufficient country in the area of energy supply and is a
significant net exporter. In 2010 net export of primary energy sources was 24.6
mln toe, which equals 53 % of domestic production.
According to International energy agency in 2010 primary energy
consumption in Turkmenistan was 2.,3 mln toe, production – 46.3 mln toe. Gas
and oil dominate in the fuel mix of the country; gas and oil share in energy sources
production is 79.7 % and 20.3 %, accordingly, in consumption – 81.4 % and 19.6
%.
According to World Bank data the structure of GDP in 2011 was comprised
of 54% of industry, 34% - service and 12% of agriculture. The main industries are
oil and gas, chemical industry, consumer goods industry (including cotton
industry). Significant role in the countries’ economy has fuel-energy complex
which account for 80 % of export income (others: cotton, chemicals).
One of the most important resources is natural gas. According to British
Petroleum in 2011 proved gas reserves accounted for 24.3 trillion cubic meters
(+81% to 2010), which is the fourth largest in the world. The biggest deposits are
South Ioltan (22 trillion cubic meters, discovered in 2006), Dovletabad (1,3 trillion
cubic meters).
Natural gas production in Turkmenistan is constantly rising after a crucial
decline in 2009 (– 46% in comparison to 2008). In 2011 54.6 billion cubic
meters of gas were produced, mostly from South Ioltan and Dovletabad reserves.
In 2000 – 2011 domestic gas consumption has almost doubled and was 25 billion
cubic meters in 2011. More than half of gas produced (53 %) is exported into
China, Russia and Iran. Supply is made through gas transmission systems.
Turkmenistan is aimed at gas supply diversification, as a result in 2009
Turkmenistan began to export gas into China, the export volume is going to be
increased in the future. There are also plans to export gas to Europe (through
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Azerbaijan) and South Asia (project of gas transmission system Turkmenistan –
Afghanistan - Pakistan - India, TAPI).
Turkmenistan does not possess large oil reserves; according to BP in 2011
proved oil reserves accounted for 82 million tons and are situated in Caspian shelf.
In 2010 oil production was 9.4 mln tonnes (10.4 million tons in 2011), 1.8 million
tons of which were exported (crude oil). The country is fully self-sufficient in oil
products, surpluses are exported (3.2 mln tonnes in 2010). Oil refining capacities
(approximately 12 million tons per year) are used for 50-60%.
In 2010 energy intensity of Turkmenistan’s GDP was 0.58 toe/1000 USD
PPP, which is one of the highest in the worlds.
Turkmenistan has a high potential of energy saving and energy efficiency
increase. The legal framework and incentives for energy saving has not been
developed yet, but the country is working under the development energy saving
law.
In 2012 a joint project between UN and Global Environment Facility was
established “Energy efficiency improvement in buildings in Turkmenistan” to be
implemented until 2015. The project will focus on two main issues: the first one
addresses energy efficiency principles in the process of engineering, building and
housing operation, the second – rational utilization and exploitation of energy
commodities and sources in houses.
The renewable energy sources potential in Turkmenistan is estimated to be
110 billion t.f.e. per year. Highest potential have sun and wind energy sources.
Turkmenistan has high potential for wind power generation (640 billion
kWh per year). Solar energy potential is estimated to be 1.4 billion t.f.e. per year.
There are small hydropower capacities in Turkmenistan (approximately 5 MW).
Energy strategy of Turkmenistan until 2030 is being developed recently. There are
the following priority issues in Energy strategy project:
• to increase fuel efficiency in power plants through modern combustion
systems;
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• to increase energy efficiency in municipal services and industry, heating
system modernization;
• energy saving measures in housing and industries;
• to increase the share of non-fossil renewables in energy mix.
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Annex 10. Republic of Uzbekistan
The GDP structure of Uzbekistan is composed by industrial sector – 33%,
service – 45.2%, and a significant share of agriculture – 21.8%. Private sector has
81.7% of GDP, small business – 52.5% of all production.
Since 2001 power energy sector in Uzbekistan is managed by State Joint
Stock Company “Uzbekenergo”.
Sate inspection of the Republic of Uzbekistan on supervision for power
industry (Uzgosenergonadzor) is the main regulatory body in power industry.
More over State Joint Stock Company “Uzbekenergo” and National Holding
“Uzbekneftegaz” are responsible for energy efficient and energy saving
technologies deployment.
Department of pricing under the Ministry of finance of Uzbekistan Republic
defines tariffs for all energy sources in country.
National Holding “Uzbekneftegaz” is a vertically-integrated three-level
company and controls the whole oil and gas branch in Uzbekistan.
Energy policy is focused on the following issues: to provide energy
independence and energy security, to increase energy efficiency and to reduce
negative impact on the environment. In order to achieve these tasks new,
innovative, safe ecological technologies are being developed and deployed;
measures that influence optimal fuel mix structure, that introduce new methods and
principles of energy saving management and that in general increase energy
efficiency of energy and power production and consumption are being introduced.
One of the most important factors in achieving these tasks, as defined in Law
“On rational energy utilization” is the development of technical standard
documentation in compliance with international standards in energy production,
transporting and consumption that are focused on energy efficiency increase. The
development of such documents is also under the responsibility of
Uzgosenergonadzor).
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In order to implement the Law “On rational energy utilization” the company
has developed “Energy saving program of Uzbekenergo until 2020”. This program
has started its implementation recently and addresses energy saving measures.
One of the priorities in energy policy is to secure consistent energy
efficiency increase based on technologies, power machines, equipment, transport
and other.
The Government of Uzbekistan considers energy efficiency as one of the
key instruments that will secure sustainable economic development that will
influence capacities modernization, social and environmental situation, fuel and
energy production growth.
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Annex 11. Ukraine
Ukrainian economy has one of the highest energy intensity in the world.
According to International Energy Agency (IEA) in Ukraine in 2007 414 g of fuel
equivalent were used for every dollar of GDP, while in the United Kingdom – 115
g of fuel equivalent, in Germany and in Japan – 140 g of fuel equivalent, in Russia
– 350 g of fuel equivalent.
More than 40% of all energy sources are consumed in industrial sector.
According to IFC overview “Energy efficiency: new source for sustainable
development” energy saving potential in Ukraine is 65 %.
Main goals in Ukraine at present are as follows:
1. to reduce energy intensity of GDP by 20 % till 2015 in comparison to 2008
(3.3 % annually), to increase energy efficiency and competitiveness of the national
economy;
2. to diversify energy mix, to increase the share of renewable and alternative
energy sources by minimum 10 % until 2015 through reduction of fossil fuel share
in import, in particular natural gas and to rise the share of alternative and
secondary energy sources.
In order to address these goals Ukraine has the following objectives:
• to substitute natural gas in energy mix, starting from 2016 by minimum 15
billion cubic meters; substitute oil products – 1 million tons;
• to increase the level of heating supply to the population and to decrease the
consumption of natural gas for heating production in housing stock by 60 %, in
public sector buildings by 35 %;
• to reduce state budgetary financing of public facilities and public sector
energy procurement by 50 %;
• to reduce the consumption of imported gas by 25 %;
• to reduce energy intensity by 20 % in transportation, storage and distribution
of gas in comparison to 2008; to provide security and energy efficiency in natural
gas transmission through gas transmission pipelines;
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• to reduce the amount of natural resources consumption by 15-20 % through
fuel energy consumption reduction.
New technologies are the main factors of energy intensity reduction in
Ukraine, especially in metallurgy and chemical industries, housing and community
services.
State targeted economic program on energy efficiency for the period 2010-
2015 is aimed at GDP energy intensity reduction in order to reach the level of
advanced economies and EU standards as to provide energy efficiency growth.
Energy efficiency and RES issues are regulated by or mentioned in more than 200
regulatory acts, including 11 laws of Ukraine, 15 presidential decrees and more
than 120 governmental decrees, state and international energy saving programs.
The most important are:
- “Energy saving” law, 1994;
- “Power energy” law, 16.10.1997;
- “Alternative energy” law, 20.02.2003;
- “Combined heat and power and waste utilization” law;
- “Energy strategy of Ukraine until 2030”, 2006;
- “State energy efficiency program until 2015”, 2010.
The main document in energy saving and energy efficiency increase is the
State target economic program on energy efficiency and energy production sector
development based on renewable and alternative energy sources in 2010-2015.
The adoption of National action plan on energy efficiency until 2020 by
State agency on energy efficiency and energy saving is expected to be the most
important event in energy efficiency.
The main executive body in energy efficiency, energy saving and renewable
and alternative energy sources policy in Ukraine is the State Agency on Energy
Efficiency and Energy Saving.
State Agency on Energy Efficiency and Energy Saving will develop and
approve National energy efficiency action plan until 2020 in the frames of Ukraine
obligations to EU. The main goal of National action plan is to contribute to energy
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efficiency increase by 20 % until 2020 and to increase the share of renewables by
11 %. The general goal of the Plan is to reduce energy consumption at national
level by 9 % of the final consumption which equals to 6.23mln toe.
Moreover, it is planned in Ukraine to develop and adopt the following programs on
energy efficiency and energy saving:
• Long-term energy saving program in Ukraine foresees to substitute natural
gas with alternative energy, to increase the share of own energy resources
production and to reduce the energy intensity in housing and community services;
• Integrated state target program in housing and community services
modernization. The program should replace two exciting programs and three
programs, which are under development;
• Industrial energy efficiency and energy saving program of the State
committee in television and radio-broadcasting;
• Industrial energy efficiency and energy saving program of the Ministry of
defense;
• Communication strategy of agriculture and industry of Ukraine, which
should increase the awareness of market actors about best practices in energy
efficiency in agro-industrial complex in Ukraine.
Among the measures for RES stimulation and energy efficiency increase in
Ukraine should be mentioned: custom tariffs, taxing, state guarantees and public-
private partnership as well as green tariffs.
It is important to notice that Ukraine demonstrates a comprehensive
approach to energy efficiency increase. There is a developed regulatory and legal
framework existing already, a regulatory and monitoring energy saving system is
functioning. There are steps provided to stop cross-subsidizing in energy sector.